Socio-economic impact of contract farming on smallholder poultry producers

Abstract:

Contract farming in poultry has expanded rapidly in western India, but whether smallholder producers genuinely benefit or become trapped in asymmetric arrangements is debated. This research compared the socio-economic outcomes of 80 contract and 80 independent smallholder broiler producers in the Ratnagiri and Sindhudurg districts of Maharashtra during 2022-2023. Contract farmers earned 28.4% higher net income per batch (₹48,620 vs. ₹37,840), experienced 34.2% lower price risk, and had 92.5% market access certainty. However, they retained less decision-making autonomy (score 3.2 vs. 4.6 on a 5-point scale) and reported higher dependency on the integrator company. Technical support from integrators improved feed conversion ratio by 11.8% and reduced mortality by 4.2 percentage points. Tobit regression showed that contract participation, flock size, and access to veterinary services were the strongest predictors of net income. These results indicate that contract farming offers tangible income and market access benefits to smallholder poultry producers but requires regulatory safeguards to prevent exploitative terms.