The Social Performance and Distributional Consequences of Contract Farming: An Equilibrium Analysis of the Arachide de Bouche Program in Senegal

This paper is an empirical analysis of the impact of a contract-farming program in Senegal. We examine the access of poorer community members to contracts and the effect of the program on the income of participants. The program performs very well on both counts: participants and nonparticipants are indistinguishable by wealth measures and farmers increase their income substantially by participating in the program. We attribute the former to the program's mobilization of local information through its use of village intermediaries, permitting the substitution of social collateral for physical collateral and making the program more accessible to the poor.