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.
Policy brief No. 2. The majority of the world’s poor are smallholder farmers in developing countries. These smallhol- ders face several obstacles that limit their produc- tivity and profits, such that their incomes remain low. Institutional changes in the agricultural value chains are required to reduce poverty rates among smallholder farmers, and to stimulate agricultural growth.
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.
Smallholder farmers in developing countries often suffer from high risk and limited market access. Contract farming may improve the situation under certain conditions. Several studies analyzed effects of contracts on smallholder productivity and income with mixed results. Most existing studies focused on one particular contract scheme. Contract characteristics rarely differ within one scheme, so little is known about how different contract characteristics may influence the benefits for smallholders.