Agricultural extension and imperfect supervision in contract farming: evidence from Madagascar

This article tests whether agricultural extension and imperfect supervision—conflated here into the number of visits by a technical assistant—increase productivity in a sample of contract farming arrangements between a processing firm and small agricultural producers in Madagascar. Production functions are estimated which treat the number of visits by a technical assistant as an input and which exploit the variation in the number of visits between the contracted crops grown on a given plot by a specific grower, thereby accounting for district‐, grower‐, and plot‐level unobserved heterogeneity. Results indicate that the elasticity of yield with respect to the number of visits lies between 1.3 and 1.7.