The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model

Yahaya Abdulai; Abraham Zakaria; Abdulai Abdul-Mumin

doi:doi:10.11648/j.ijae.20251006.13

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The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model

Yahaya Abdulai^*

, Abraham Zakaria

, Abdulai Abdul-Mumin

Published in International Journal of Agricultural Economics (Volume 10, Issue 6)

Received: 11 October 2025 Accepted: 25 October 2025 Published: 3 December 2025

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Abstract

This study investigates the association of contract farming (CF) with technical, allocative, and economic efficiencies among soybean farmers in Northern Ghana. The study employed multistage sampling techniques to collect data from 374 soybean farmers (200 contract farmers and 174 non-contract farmers) across three districts in the study area. The endogenous treatment effect regression model was used for the estimation to address potential self-selection bias in contract participation, using the maximum likelihood estimation method. A stochastic frontier analysis was first used to estimate efficiency scores, which were then used as dependent variables in the endogenous treatment effect model. Results demonstrate that contract farming has significant positive effects on all efficiency measures. Specifically, CF soybean farmers technical efficiency increases by 37%, allocative efficiency increases by 35%, and economic efficiency increases by 6%. The estimated correlation between treatment assignment errors and outcome errors are statistically significant, suggesting that farmers with above-average efficiency metrics are more likely to participate in CF arrangements. We conclude that CF is a pathway to enhance soybean productivity and efficiency. These findings provide valuable insights for policymakers and agricultural development practitioners seeking to improve efficiency in soybean production through institutional arrangements like CF, while accounting for the farmers’ inner ability and behavioral factors in CF decision-making.

Published in	International Journal of Agricultural Economics (Volume 10, Issue 6)
DOI	10.11648/j.ijae.20251006.13
Page(s)	365-375
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2025. Published by Science Publishing Group

Keywords

Contract Farming, Technical Efficiency, Allocative Efficiency, Economic Efficiency, Endogenous Treatment Effects, Soybean Production

References

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Abdulai, Y., Zakaria, A., Abdul-Mumin, A. (2025). The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model. International Journal of Agricultural Economics, 10(6), 365-375. https://doi.org/10.11648/j.ijae.20251006.13

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ACS Style

Abdulai, Y.; Zakaria, A.; Abdul-Mumin, A. The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model. Int. J. Agric. Econ. 2025, 10(6), 365-375. doi: 10.11648/j.ijae.20251006.13

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AMA Style

Abdulai Y, Zakaria A, Abdul-Mumin A. The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model. Int J Agric Econ. 2025;10(6):365-375. doi: 10.11648/j.ijae.20251006.13

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@article{10.11648/j.ijae.20251006.13,
  author = {Yahaya Abdulai and Abraham Zakaria and Abdulai Abdul-Mumin},
  title = {The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model
},
  journal = {International Journal of Agricultural Economics},
  volume = {10},
  number = {6},
  pages = {365-375},
  doi = {10.11648/j.ijae.20251006.13},
  url = {https://doi.org/10.11648/j.ijae.20251006.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20251006.13},
  abstract = {This study investigates the association of contract farming (CF) with technical, allocative, and economic efficiencies among soybean farmers in Northern Ghana. The study employed multistage sampling techniques to collect data from 374 soybean farmers (200 contract farmers and 174 non-contract farmers) across three districts in the study area. The endogenous treatment effect regression model was used for the estimation to address potential self-selection bias in contract participation, using the maximum likelihood estimation method. A stochastic frontier analysis was first used to estimate efficiency scores, which were then used as dependent variables in the endogenous treatment effect model. Results demonstrate that contract farming has significant positive effects on all efficiency measures. Specifically, CF soybean farmers technical efficiency increases by 37%, allocative efficiency increases by 35%, and economic efficiency increases by 6%. The estimated correlation between treatment assignment errors and outcome errors are statistically significant, suggesting that farmers with above-average efficiency metrics are more likely to participate in CF arrangements. We conclude that CF is a pathway to enhance soybean productivity and efficiency. These findings provide valuable insights for policymakers and agricultural development practitioners seeking to improve efficiency in soybean production through institutional arrangements like CF, while accounting for the farmers’ inner ability and behavioral factors in CF decision-making.
},
 year = {2025}
}

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TY  - JOUR
T1  - The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model

AU  - Yahaya Abdulai
AU  - Abraham Zakaria
AU  - Abdulai Abdul-Mumin
Y1  - 2025/12/03
PY  - 2025
N1  - https://doi.org/10.11648/j.ijae.20251006.13
DO  - 10.11648/j.ijae.20251006.13
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 365
EP  - 375
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20251006.13
AB  - This study investigates the association of contract farming (CF) with technical, allocative, and economic efficiencies among soybean farmers in Northern Ghana. The study employed multistage sampling techniques to collect data from 374 soybean farmers (200 contract farmers and 174 non-contract farmers) across three districts in the study area. The endogenous treatment effect regression model was used for the estimation to address potential self-selection bias in contract participation, using the maximum likelihood estimation method. A stochastic frontier analysis was first used to estimate efficiency scores, which were then used as dependent variables in the endogenous treatment effect model. Results demonstrate that contract farming has significant positive effects on all efficiency measures. Specifically, CF soybean farmers technical efficiency increases by 37%, allocative efficiency increases by 35%, and economic efficiency increases by 6%. The estimated correlation between treatment assignment errors and outcome errors are statistically significant, suggesting that farmers with above-average efficiency metrics are more likely to participate in CF arrangements. We conclude that CF is a pathway to enhance soybean productivity and efficiency. These findings provide valuable insights for policymakers and agricultural development practitioners seeking to improve efficiency in soybean production through institutional arrangements like CF, while accounting for the farmers’ inner ability and behavioral factors in CF decision-making.

VL  - 10
IS  - 6
ER  -

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Author Information

Yahaya Abdulai

Department of Agribusiness, Tamale Technical University, Tamale, Ghana

Contact Email

http://orcid.org/0009-0007-2295-9668
Abraham Zakaria

West African Centre for Shea Innovation and Research (WACSIR), University for Development Studies, Tamale, Ghana; Department of Food Security and Climate Change, University for Development Studies, Tamale, Ghana

Contact Email

http://orcid.org/0000-0002-1522-7510
Abdulai Abdul-Mumin

Department of Agribusiness, Tamale Technical University, Tamale, Ghana

Contact Email

http://orcid.org/0000-0002-6005-1729

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APA Style

Abdulai, Y., Zakaria, A., Abdul-Mumin, A. (2025). The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model. International Journal of Agricultural Economics, 10(6), 365-375. https://doi.org/10.11648/j.ijae.20251006.13

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ACS Style

Abdulai, Y.; Zakaria, A.; Abdul-Mumin, A. The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model. Int. J. Agric. Econ. 2025, 10(6), 365-375. doi: 10.11648/j.ijae.20251006.13

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AMA Style

Abdulai Y, Zakaria A, Abdul-Mumin A. The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model. Int J Agric Econ. 2025;10(6):365-375. doi: 10.11648/j.ijae.20251006.13

Copy | Download

@article{10.11648/j.ijae.20251006.13,
  author = {Yahaya Abdulai and Abraham Zakaria and Abdulai Abdul-Mumin},
  title = {The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model
},
  journal = {International Journal of Agricultural Economics},
  volume = {10},
  number = {6},
  pages = {365-375},
  doi = {10.11648/j.ijae.20251006.13},
  url = {https://doi.org/10.11648/j.ijae.20251006.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20251006.13},
  abstract = {This study investigates the association of contract farming (CF) with technical, allocative, and economic efficiencies among soybean farmers in Northern Ghana. The study employed multistage sampling techniques to collect data from 374 soybean farmers (200 contract farmers and 174 non-contract farmers) across three districts in the study area. The endogenous treatment effect regression model was used for the estimation to address potential self-selection bias in contract participation, using the maximum likelihood estimation method. A stochastic frontier analysis was first used to estimate efficiency scores, which were then used as dependent variables in the endogenous treatment effect model. Results demonstrate that contract farming has significant positive effects on all efficiency measures. Specifically, CF soybean farmers technical efficiency increases by 37%, allocative efficiency increases by 35%, and economic efficiency increases by 6%. The estimated correlation between treatment assignment errors and outcome errors are statistically significant, suggesting that farmers with above-average efficiency metrics are more likely to participate in CF arrangements. We conclude that CF is a pathway to enhance soybean productivity and efficiency. These findings provide valuable insights for policymakers and agricultural development practitioners seeking to improve efficiency in soybean production through institutional arrangements like CF, while accounting for the farmers’ inner ability and behavioral factors in CF decision-making.
},
 year = {2025}
}

Copy | Download

TY  - JOUR
T1  - The Impact of Contract Farming on Efficiency Among Soybean Producers in Northern Ghana: Evidence from an Endogenous Treatment Effect Model

AU  - Yahaya Abdulai
AU  - Abraham Zakaria
AU  - Abdulai Abdul-Mumin
Y1  - 2025/12/03
PY  - 2025
N1  - https://doi.org/10.11648/j.ijae.20251006.13
DO  - 10.11648/j.ijae.20251006.13
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 365
EP  - 375
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20251006.13
AB  - This study investigates the association of contract farming (CF) with technical, allocative, and economic efficiencies among soybean farmers in Northern Ghana. The study employed multistage sampling techniques to collect data from 374 soybean farmers (200 contract farmers and 174 non-contract farmers) across three districts in the study area. The endogenous treatment effect regression model was used for the estimation to address potential self-selection bias in contract participation, using the maximum likelihood estimation method. A stochastic frontier analysis was first used to estimate efficiency scores, which were then used as dependent variables in the endogenous treatment effect model. Results demonstrate that contract farming has significant positive effects on all efficiency measures. Specifically, CF soybean farmers technical efficiency increases by 37%, allocative efficiency increases by 35%, and economic efficiency increases by 6%. The estimated correlation between treatment assignment errors and outcome errors are statistically significant, suggesting that farmers with above-average efficiency metrics are more likely to participate in CF arrangements. We conclude that CF is a pathway to enhance soybean productivity and efficiency. These findings provide valuable insights for policymakers and agricultural development practitioners seeking to improve efficiency in soybean production through institutional arrangements like CF, while accounting for the farmers’ inner ability and behavioral factors in CF decision-making.

VL  - 10
IS  - 6
ER  -

Copy | Download