Abstract:
Contract farming – an agreement between a farmer and a buyer on agricultural production – is expected to mitigate market failure in developing countries and improve farmers’ welfare. However, its success is frequently undermined by enforcement issues, such as contractual default and side-selling. These challenges are particularly salient in expanding markets with many new entrants because neighboring farmers can share information and collude. This study examines such peer effects on farmers’ decisions in contractual enforcement, focusing on contract farming of organic pepper in Kampot, Cambodia. Employing a spatial econometric approach, we find that neighboring farmers’ side-selling increases the likelihood of a farmer engaging in side-selling, suggesting the presence of positive peer effects. These findings highlight the importance of policy interventions to curb the spread of side-selling and to support the institutional sustainability of contract farming arrangements.
Registration: yuri-kitabayashi@iss.u-tokyo.ac.jp（東京大学中林研究室 北林様宛)
The Osaka Workshop on Economics of Institutions and Organizations
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The meeting is organized in collaboration with International Public Policy Seminar
2025年度 第13回 大阪大学経済学研究会（11月27日）