Vol. 119 No. 1 (2025)
Research Papers

Modelling Contract Farming Impact on Poultry Farm Income: Lessons from the Nigerian Anchor-Borrower Outgrowers’ Programme

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  • Olabisi Damilola Omodara,
  • Oluwemimo Oluwasola,
  • Akinsola Temitope Oyebanji
Olabisi Damilola Omodara
Department of Agricultural Economics, Obafemi Awolowo University, Ile-Ife. Nigeria
Oluwemimo Oluwasola
Department of Agricultural Economics, Obafemi Awolowo University, Ile-Ife. Nigeria
Bio
Akinsola Temitope Oyebanji
Ness School of Management and Economics, South Dakota State University, USA
Bio
DOI: https://doi.org/10.36253/jaeid-15968

Published 2025-07-08

Keywords

  • Contract farming,
  • net farm income,
  • endogenous switching regression model,
  • AIPWR model,
  • average treatment effect

How to Cite

Omodara, O. D., Oluwasola, O., & Oyebanji, A. T. (2025). Modelling Contract Farming Impact on Poultry Farm Income: Lessons from the Nigerian Anchor-Borrower Outgrowers’ Programme. Journal of Agriculture and Environment for International Development (JAEID), 119(1), 85–100. https://doi.org/10.36253/jaeid-15968

Copyright (c) 2025 Olabisi Damilola Omodara, Oluwemimo Oluwasola, Temitope Oyebanji

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

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Abstract

Contract farming was introduced in Nigeria to address the challenges faced by smallholder farming households in realising farming objectives. Therefore, this study examined the effectiveness of the Anchor-borrower Outgrowers’ Programme in fulfilling one of its roles of increasing the net farm income of poultry farming households in Nigeria. A multistage sampling technique was used for data collection from the respondents. The endogenous switching regression model was used to estimate the impact of contract farming on the net farm income of farming households in Southwestern Nigeria. The findings from the first stage of the Endogenous Switching Regression Model revealed that age, major distribution outlet, off-farm income, transaction cost, flock size, and association membership determined farmers’ participation in the poultry anchor-borrower outgrowers’ scheme. The second stage further revealed the socioeconomic characteristics affecting the net income of beneficiaries and non-beneficiaries, including sales price, flock size, proximity to the urban center (Lagos), education qualification, off-farm income, and transaction cost. The result from the estimated average treatment effect (ATE) revealed that participation in anchor-borrower poultry contract farming had a positive influence on the net farm income of beneficiaries. Thus, evaluating and providing solutions to factors highlighted in this study that hinder participation in contract farming is important to ensuring more farmers enjoy the opportunities provided by contract farming. In this same vein, contract farming programmes in Nigeria should consider providing fixed inputs such as land and buildings through lease agreements, as this influences participation in the programme. In addition, older farmers should be encouraged to key into anchor-borrower poultry contract farming and refrain from viewing them as scam schemes akin to past programmes they engaged in over their extensive years of agricultural experience.

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