The Economics of Smallholder Organic Contract Farming in Tropical Africa

The paper examines the revenue effects of certified organic contract farming for smallholders and of adoption of organic agricultural fanning methods in a tropical African context. The comparison in both cases is with fanning systems that are organic by default. Survey data from a large organic coffee contract farming scheme in Uganda are reported and analyzed using a standard OLS regression and a full information maximum likelihood (FIML) estimate of the Heckman selection model. The analysis finds that, controlling for a range of factors, there are positive revenue effects both from participation in the scheme and, more modestly, from applying organic farming techniques. (C) 2008 Elsevier Ltd. All rights reserved.