Impact of dairy contract farming adoption on household resilience to food insecurity evidence from Ethiopia

Abstract

Contract farming has increased in importance in countries trying to improve the living standards of smallholder farmers, particularly those who base their livelihoods primarily on agricultural products. For this study, we looked into the assertion that dairy contract farming would boost farmers' incomes while lowering their vulnerability to food insecurity. We analyzed the data collected from 380 sample households using the structured questionnaire using PSM, SEM, and descriptive statistics. By food calorie intake consumption, 45.5% of the households were food insecure, with dairy contract participants and non-participants making up 31.21% and 68.79% of these households, respectively. The average level of resilience to food secured attained by study households is 54.5%, compared to 88.41% and 11.59 for participants and non-participants in the dairy contract. The results of the SEM for the disaggregated variables demonstrate that a household's capacity to manage food insecurity is significantly influenced by stability (educational level), asset ownership (total livestock), access to public services (access to microfinance institution services), social safety nets (access to assistance from relatives), and income & food access (total calories consumed and income access from farm activity). The results of the PSM showed that households' resilience to food insecurity was significantly increased through dairy contract farming by 18% (4967.49 Ethiopian Birr). Therefore, governments and other stakeholders should promote smallholder farmers' access to contract farming to boost household resilience to food insecurity.