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Contract Farming as an Institution for Integrating Rural Smallholders in Markets for Livestock Products in Developing Countries: (II) Results in Case Countries

Pro-Poor Livestock Policy Initiative: A Living from Livestock









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    Document
    Contract Farming as an Institution for Integrating Rural Smallholders in Markets for Livestock Products in Developing Countries: (I) Framework and Applications
    Pro-Poor Livestock Policy Initiative: A Living from Livestock
    2008
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    This report provides an overview of the theoretical underpinnings of the emergence of contract arrangements versus reliance on spot markets. Transaction costs economics is the dominant school of thought in the literature on contracts, particularly with respect to the rationale of firms to vertically integrate instead of engaging in direct exchange in the open market. Vertical integration and other forms of exchange organisation are traced to the objective of economic agents to reduce transaction costs in an environment where market imperfections predominate and economic agents behave opportunistically.
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    Strengthening Market Linkages of Smallholder Pig Producers through Informal Contracts in Northern Viet Nam
    Pro-Poor Livestock Policy Initiative: A Living from Livestock
    2007
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    Formal contracts with integrator companies are limited to large-scale pig producers in Viet Nam. There are, however, forms of informal contracts where smaller-scale pig producers establish stable links with their input suppliers or/and output buyers. Traders screen farmers with whom they could potentially engage into contracts. As relations become more established and stable, farmer reputation / reliability, rather than scale of production, becomes the more important consideration. Human and social capital factors of pig producers are found to be significant determinants of participation in contracts. Farmers engaged in informal contracts with cooperatives benefit from contract participation through higher average net returns per unit of output in the case they use ‘mixed breeds’ of pigs. The benefit is not clear cut with respect to the use of exotic breeds.
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    Brochure, flyer, fact-sheet
    Contract farming: Legal considerations on contractual design and enforcement 2017
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    Contract farming can be defined as agricultural production carried out according to an agreement between farmers and a buyer which establishes conditions for the production and marketing of a farm product. To be binding and enforceable, such agreements depend not only on good contractual design, but also on the existence of an adequate legal framework. This brief aims to illustrate some of the legal issues involved in the design, negotiation and enforcement of farming contracts.

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