Can contract farming support sustainable intensification in agri-food value chains?

Abstract

Sustainable intensification aims to minimize the negative impacts of the current agricultural system while maintaining productivity and economic outputs. This study demonstrates that contract farming is a potential mechanism to support many, but not all, farmers in adopting sustainable intensification practices. A discrete choice experiment on a hypothetical value chain contract introducing three sustainable intensification practices, namely extended crop rotation, reducing agrochemicals and planting flower strips, was conducted with a sample of 314 north-Italian wheat farmers. The results show that permanently eliminating glyphosate from the plot under contract is strongly resisted by farmers, while farmers have less strong preferences between introducing legumes or oilseeds in rotation, and between temporary or permanent flower strips. Findings also indicate that farmers who are more educated, are not members of cooperatives and who generally prefer more flexible sales arrangements are unlikely to be triggered to adopt sustainable intensification practices through contract farming. Overall, this study indicates that while voluntary contract arrangements can be a potential tool to increase uptake of sustainable intensification practices, they will likely need to be complemented with more public policy intervention in order to bring sustainable intensification practices to scale.