Factors Affecting the Selection of Agricultural Contracts from the Viewpoint of Farmers in the County of Bardsir: Method of Mixed Logit

Document Type : Research Paper

Authors

1 M.Sc. Graduate of Agricultural Economics Department, Shahid Bahonar University of Kerman, Kerman, Iran

2 Assistant Professor, Department of Agricultural Economics, Agricultural College, Shahid Bahonar University of Kerman, Kerman, Iran

Abstract

In the absence of capital and agricultural marketing problems, agricultural contracts are good ways to raise capital, ensure product sales, create fair prices, and ultimately, the balance development of the agricultural sector. It will lead to a more balanced distribution of the benefits of commercialization, with greater access to opportunities for more of the sector's activists. Cultivation contracts can help farmers and the industries, due to the possibility of cultivating different plants and the existence of processing industries in Bardsir. In this regard, 130 farmers were selected by random cluster sampling, in 2017-2018. Subsequently, four types of contracts were obtained based on the factors of pattern of cultivation, contract period, control over production, supply of inputs by the contractor and the manner of payment, using the fractional factorial design. The contractor's powers increasing from the first to the fourth contracts. Then, the effects of age, cultivar, history of agriculture, ownership, education, product diversity and the history of participation in agricultural contracts on the contracts were investigated, using the mixed logit model. The findings show that by increasing the area under cultivation, ownership and educational level, the probability of choosing the first to the third contracts increases compared with the fourth one (base contract), while with diversity of cultivation and farmer's familiarity with agricultural contracts, the base contract would be preferred. With an increase in work experience in agricultural activity, a change in the level of ownership from rent to a civilian, and an increase in the level of education, the probability of choosing the fourth contract decreased by 1.6, 14.5 and 22 percent, respectively. While diversity of cultivation and the history of participation in contracts, the chances of choosing this contract increased by 10% and 20% respectively. Therefore, the contractors is better to pay attention to farmers who have less cultivated land, more diverse products and lower education levels,  to increase productivity and support micro-farmers, by controlling and supervision. 

Keywords

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Iranian Journal of Agricultural Economics and Development Research
Volume 51, Issue 2
May 2020
Pages 263-278

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