Welfare Impact Of Contracting In Value Chains: The Case Of Malt Barley Producers In Ethiopia: The Case Of Malt Barley Producers In Ethiopia

Food chains in Africa are undergoing major changes because of rapid urbanization and rising income. Contract farming arrangement (CFA) has been central in the modernization of food supply chains and receives increased attention in the development strategies of many African countries. Several studies investigated the welfare impacts of CFA; however, most of these focused on export supply chains of horticultural products. We examined the welfare impacts of CFA within a domestic grain supply chain using propensity score-matching. The study utilized cross-sectional survey data from Ethiopia. Consistent with literature, we found CFA has robust positive impacts on farmers’ income and livelihood.