Impact of Contract Farming on Beef Cattle Farmers' Income: A Propensity Score Matching Analysis

This study aims to investigate the impact of contract farming participation on the income of beef cattle farmers. For this purpose, the data was collected from 155 farmers by face-to-face questionnaires in Adana province in 2016. The impact of contract farming on farmers' income was identified using Propensity Score Matching. The results show that farmers who participate in the contract have more assets and mostly have a larger herd in comparison with non-contract. Further, contract participation entails a 10.04% increase in income (p<0.01). Given that most of the contract farms are large-scale, it can be said that this gain in income is not enough for encouraging smallholders to participate in contract farming. The evidence from this study suggests that policymakers should focus on providing appropriate technical assistance, giving price premiums and bonuses inversely proportional to farm-scale and improve extension services to enhance the rate of smallholder contract participation.