Contract farming and sesame productivity of smallholder farmers in Western Tigray, Ethiopia

Abstract

Contract farming was implemented in Tigray to improve access to support and marketing services and ensure consistency in the volume of supplied products. However, its impact has not been examined yet. Therefore, this study estimates the impact of contract farming on sesame productivity farmers in western Tigray. The study uses cross-sectional farm household-level data collected in 2021 with a sample of 397 household heads and those household heads were selected using a multistage stratified random sampling technique. Propensity Score Matching and Endogenous Switching Regression models were employed to estimate the impact of contract farming on Sesame productivity and to check the robustness of the results. Our findings show that participation in contract farming corroborates important improvements for contract farmers via the chosen output indicators. The number of workers used, farming experience, inorganic fertilizer use, seed variety, and farm size allocated to sesame were positively associated with both contract and non-contract farmers. However, years of schooling were positively correlated while the age of household heads was negatively associated with contract farmers. On the other hand, access to extension services was negatively correlated with the non-contract farmers. The endogenous switching regression model predicts two results coincidentally for the contract and non-contract farmers. The result indicates that 400 kg per hectare would reduce sesame productivity if the farmers would not adopt contract farming while non-contract farmers could improve their sesame productivity by 150 kg per hectare if they would be part of the program.

Keywords:

• Sesame productivity
• contract farming
• impact
• endogenous switching regression
• Ethiopia

REVIEWING EDITOR:

• Manuel Tejada, University of Seville, Spain

SUBJECTS:

• Soil Sciences
• Agriculture & Environmental Sciences
• Development Studies
• Development Policy
• Sustainable Development

Acknowledgement

I would like to express my heartfelt gratitude to Mr. Gidey Kidu for his invaluable technical guidance in designing, analyzing, interpreting the result as well as support and unwavering patience throughout the entire process of this study. I would also like to extend my thanks to Mekelle University for providing funding for this research.

Authors’ contributions

Haileslasie Gereziher Hailu: Conceptualization, Data Curation, Methodology, Formal Analysis, Writing-Original Draft, Writing-Review, Editing, revising comments, And Supervision. Gidey Kidu Mezgebo: Formal Analysis, Writing-Original Draft, Writing-Review, Data Curation, Revising Comments, and Editing.

Disclosure statement

There is no any conflict of interest reported by the author(s).

Ethical approval

The study was approved by the College of Dryland Agriculture and Natural Resources, Research and Community Engagement Committee, Mekelle University, Ethiopia (RPDO/MU/03/2020).

Data availability statement

Both authors declare and agreed that data will be made available on request.

Additional information

Funding

Mekelle University was the source fund for this study.

Notes on contributors

Haileslasie Gereziher Hailu

Haileslasie Gereziher Hailu (MSc) in Economics is a Lecturer and Researcher at Mekelle University, College of Dryland Agriculture and Natural Resources, Department of Agricultural and Resource Economics. His research interest is in Agricultural Productivity and Welfare of households, Sustainable Agriculture, Food Economics and Policy, and Climate Change and Agriculture.

Gidey Kidu Mezgebo

Gidey Kidu Mezgebo (Asst prof) in Natural Resource Economic and Policy is Lecturer and Researcher at Mekelle University College of Dryland Agriculture and Natural Resource, Department of Agricultural and Resource Economics. His research area interest is in Natural Resource Policy, Agricultural Productivity, Agricultural Policy, and agricultural technology.