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Decision-making under Rice Contract and Non-Contract Farming Arrangements in Ekiti State, Nigeria: A Game Theory Approach
DOI: http://dx.doi.org/10.1991/jefa.v8i1.a68
Abstract
Utilizing Ordinary Least Squares (OLS) technique on a randomly selected sample of 126 rice farmers from Ekiti State, Southwest Nigeria, our analysis reveals that rice farming in the region is economically viable, with contract farming demonstrating greater profitability compared to non-contract farming. The profitability of paddy rice cultivation is notably influenced by several factors, including farming experience, participation in cooperative associations, age, access to extension services, and agricultural training. Specifically, we observe that years of farming experience, membership in the association, and access to extension service positively influence profitability of paddy rice production of contracted farmers; while farmer age and formal training positively influence profitability of paddy rice production of non-contracted farmers.
Moreover, our study indicates that optimistic farmers are inclined towards adopting the contract farming model, while pessimistic farmers tend to favor non-contract arrangements. Thus, we recommend that optimistic farmers consider engaging in contract farming, while a non-contract approach is advisable for pessimistic rice farmers.
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