Farm workers in developing countries often belong to the poorest of the poor. They typically face low wages, informal working arrangements, and inadequate social protection. Written employment contracts with clearly defined rights and obligations could possibly help, but it is not clear how such contracts could be introduced and promoted in traditional peasant environments. To address this question, we develop and implement a randomized controlled trial with farmers in Côte d’Ivoire.
We look at the trade-off between smallholder cocoa intensification and the ecosystem in Indonesia and investigate the determinants of environmental efficiency in cocoa production. In our analysis, we apply a distance output function that includes cocoa production and the abundance of native rainforest plants as outputs. Our data set, based on a household and environment survey conducted in 2015, allows us to analyze 208 cocoa producers with both measured and self-reported data. We find that the intensification of cocoa farms results in higher ecosystem degradation.