Policy brief No. 1. In recent years, food consumers have become in- creasingly aware of and concerned about the sa- fety of food products. As a response, public and private actors have introduced different standards to ensure that food safety reaches the degree de- manded by consumers. Developing countries often lack the institutional capacities and financial and non-financial resources to comply with standards.
In the existing literature, the effects of contract farming on household welfare were examined with mixed results. Most studies looked at single contract types. This paper contributes to the literature by comparing two types of contracts – simple marketing contracts and resource- providing contracts – in the Ghanaian oil palm sector. We investigate the effects of both contracts on farm income, as well as spillovers on other household income sources. We use survey data collected with an innovative sampling design and a control function approach to address possible issues of endogeneity.