My paper titled “Contract Farming and Food Security,” which I wrote with my PhD student Lindsey Novak, has recently been accepted by and is thus forthcoming at the American Journal of Agricultural Economics.
Here is the abstract:
Contract farming has often been associated with an increase in the income of participating households. It is unclear, however, whether contract farming increases other aspects of household welfare. We use data from six regions of Madagascar and a selection-on-observables design in which we control for a household’s marginal utility of participating in contract farming, which we elicited via a contingent valuation experiment, to show that participating in contract farming reduces the duration of a household’s hungry season by about eight days on average. Further, participation in contract farming makes participating households about 18 percent more likely to see their hungry season end at any time. Moreover, we find that these effects are more pronounced for households with more children, and for households with more girls. This is an important result as children—especially girls—often bear the burden of food insecurity.
A few things, in no particular order:
- In various keynote and invited presentations I have given these past few years on what I see as the future of research on contract farming and agricultural value chains, I have often mentioned that the research needs to start looking at outcomes beyond income (or some closely related measures). There are literally dozens of papers looking at whether participation in contract farming leads to higher incomes, including my own contribution. This forthcoming article was a chance to lead by example by looking at a less proximate outcome variable, viz. the duration of the hungry season experience by each household.
- We find that participating in contract farming as a grower is associated with a decrease in the length of the hungry season experienced by the average household. This is interesting in and of itself, but more interestingly, we find that this is true even when controlling for income. That is, the seeming improvement in food security seems to (also) stem from non-income sources.
- Given the selection-on-observables (SOO) design, this paper was a good occasion to look at regression and matching approaches side-by-side. Indeed, the regression approach can tell us what is the effect of participating in contract farming on the length of the hungry season experienced by the household for the average household, but it tells us nothing about (i) what is the effect of participation for those households that do participate (i.e., the average treatment effect on the treated), and (ii) what the effect of participation would be for those households that do not participate (i.e., the average treatment effect on the untreated). Though I am generally not a fan of matching methods, the same assumption which made the SOO design possible also made the conditional independence assumption likely to hold here. The good news is that whether we use regression or matching, the average treatment effect is pretty much the same.
- This is one of the very few instances during my career where the peer-review process made the paper substantially better than what we originally submitted. The editor in charge and the reviewers made us think more carefully about our findings and explore different mechanisms, and for that we are very grateful.