Analysis of the induced effects of contract farming on the demand for hired labor in togo

Abstract

The purpose of this paper is to analyze the induced effects of contract farming on the demand for hired labor in Togo. To do so, data from the National Institute of Statistics and Economic and Demographic Studies (INSEED) (509 contracting producers and 384 non-contracting producers) collected in 2017 and 2020 within the framework of the Support Project for the Employability and Insertion of Youth in Promising Sectors (PAEIJ-SP) were used as the basis for the estimates. The linear probability model (LPM) was used to analyze the data. The results showed that the practice of contract farming increased the probability of demand for hired labor by 2%. Furthermore, it was found that this demand for labor was higher among male soybean farmers who were under 36 years of age, had a high level of education, and were planting large areas. This suggests that contract farming stimulates new employment opportunities for non-contract households. Rural job creation can be an important vehicle for poverty reduction. Finally, the paper recommends that policymakers view contract farming in a positive light and provide incentives for contract farming in other promising sectors.