Smallholders play a vital role in global agriculture but face challenges such as resource limitations and market uncertainties. Contract farming (CF) and cooperative markets provide opportunities to smallholders to address these challenges. In this context, this study develops mathematical planning models for fresh produce supply chains (FPSCs) in two scenarios involving CF and cooperative markets with the objective of maximizing profits of smallholders. Results of computational experiments and sensitivity analysis reveal that CF has greater potential than cooperative markets to mitigate price volatility, thereby offering a stable income source to smallholders. This study provides valuable insights into CF and cooperative market practices, contributing to the sustainability of FPSCs and improving smallholders’ livelihoods.

1. [1] M. Abraham and P. Pingali, “Transforming smallholder agriculture to achieve the SDGs,” S. Gomez y Paloma, L. Riesgo, and K. Louhichi (Eds.), “The Role of Smallholder Farms in Food and Nutrition Security,” pp. 173-209, Springer, 2020. https://doi.org/10.1007/978-3-030-42148-9_9
2. [2] B. Grosh, “Contract farming in Africa: An application of the new institutional economics,” J. of African Economies, Vol.3, No.2, pp. 231-261, 1994. https://doi.org/10.1093/oxfordjournals.jae.a036805
3. [3] N. Katayama, Y. G. Baba, Y. Kusumoto, and K. Tanaka, “A review of post-war changes in rice farming and biodiversity in Japan,” Agricultural Systems, Vol.132, pp. 73-84, 2015. https://doi.org/10.1016/j.agsy.2014.09.001
4. [4] A. Gramzow, P. J. Batt, V. Afari-Sefa, M. Petrick, and R. Roothaert, “Linking smallholder vegetable producers to markets – A comparison of a vegetable producer group and a contract-farming arrangement in the Lushoto District of Tanzania,” J. of Rural Studies, Vol.63, pp. 168-179, 2018. https://doi.org/10.1016/j.jrurstud.2018.07.011
5. [5] A. Arouna, J. D. Michler, and J. C. Lokossou, “Contract farming and rural transformation: Evidence from a field experiment in Benin,” J. of Development Economics, Vol.151, Article No.102626, 2021. https://doi.org/10.1016/j.jdeveco.2021.102626
6. [6] M. F. Bellemare, Y. N. Lee, and L. Novak, “Contract farming as partial insurance,” World Development, Vol.140, Article No.105274, 2021. https://doi.org/10.1016/j.worlddev.2020.105274
7. [7] X. Du, J. Ifft, L. Lu, and D. Zilberman, “Marketing contracts and crop insurance,” American J. of Agricultural Economics, Vol.97, No.5, pp. 1360-1370, 2015. https://doi.org/10.1093/ajae/aav024
8. [8] G. Soullier and P. Moustier, “Impacts of contract farming in domestic grain chains on farmer income and food insecurity. Contrasted evidence from Senegal,” Food Policy, Vol.79, pp. 179-198, 2018. https://doi.org/10.1016/j.foodpol.2018.07.004
9. [9] M. F. Bellemare and S. Lim, “In all shapes and colors: Varieties of contract farming,” Applied Economic Perspectives and Policy, Vol.40, No.3, pp. 379-401, 2018. https://doi.org/10.1093/aepp/ppy019
10. [10] C. B. Barrett et al., “Smallholder participation in contract farming: Comparative evidence from five countries,” World Development, Vol.40, No.4, pp. 715-730, 2012. https://doi.org/10.1016/j.worlddev.2011.09.006
11. [11] K. Yamada, “Aggregation of epistemic uncertainty in forms of possibility and certainty factors,” J. Adv. Comput. Intell. Intell. Inform., Vol.24, No.1, pp. 83-94, 2020. https://doi.org/10.20965/jaciii.2020.p0083
12. [12] J. J. Glen, “Feature article—Mathematical models in farm planning: A survey,” Operations Research, Vol.35, No.5, pp. 641-666, 1987. https://doi.org/10.1287/opre.35.5.641
13. [13] O. Ahumada and J. R. Villalobos, “Application of planning models in the agri-food supply chain: A review,” European J. of Operational Research, Vol.196, No.1, pp. 1-20, 2009. https://doi.org/10.1016/j.ejor.2008.02.014
14. [14] M. Shukla and S. Jharkharia, “Agri-fresh produce supply chain management: A state-of-the-art literature review,” Int. J. of Operations & Production Management, Vol.33, No.2, pp. 114-158, 2013. https://doi.org/10.1108/01443571311295608
15. [15] W. E. Soto-Silva, E. Nadal-Roig, M. C. González-Araya, and L. M. Pla-Aragones, “Operational research models applied to the fresh fruit supply chain,” European J. of Operational Research, Vol.251, No.2, pp. 345-355, 2016. https://doi.org/10.1016/j.ejor.2015.08.046
16. [16] N. K. Tsolakis, C. A. Keramydas, A. K. Toka, D. A. Aidonis, and E. T. Iakovou, “Agrifood supply chain management: A comprehensive hierarchical decision-making framework and a critical taxonomy,” Biosystems Engineering, Vol.120, pp. 47-64, 2014. https://doi.org/10.1016/j.biosystemseng.2013.10.014
17. [17] K. Darby-Dowman, S. Barker, E. Audsley, and D. Parsons, “A two-stage stochastic programming with recourse model for determining robust planting plans in horticulture,” J. of the Operational Research Society, Vol.51, No.1, pp. 83-89, 2000. https://doi.org/10.1057/palgrave.jors.2600858
18. [18] H. Flores et al., “Use of supply chain planning tools for efficiently placing small farmers into high-value, vegetable markets,” Computers and Electronics in Agriculture, Vol.157, pp. 205-217, 2019. https://doi.org/10.1016/j.compag.2018.12.050
19. [19] O. Ahumada and J. R. Villalobos, “A tactical model for planning the production and distribution of fresh produce,” Annals of Operations Research, Vol.190, No.1, pp. 339-358, 2011. https://doi.org/10.1007/s10479-009-0614-4
20. [20] O. Ahumada and J. R. Villalobos, “Operational model for planning the harvest and distribution of perishable agricultural products,” Int. J. of Production Economics, Vol.133, No.2, pp. 677-687, 2011. https://doi.org/10.1016/j.ijpe.2011.05.015
21. [21] J. Jonkman, A. P. Barbosa-Póvoa, and J. M. Bloemhof, “Integrating harvesting decisions in the design of agro-food supply chains,” European J. of Operational Research, Vol.276, No.1, pp. 247-248, 2019. https://doi.org/10.1016/j.ejor.2018.12.024
22. [22] N. Brulard, V.-D. Cung, N. Catusse, and C. Dutrieux, “An integrated sizing and planning problem in designing diverse vegetable farming systems,” Int. J. of Production Research, Vol.57, No.4, pp. 1018-1036, 2019. https://doi.org/10.1080/00207543.2018.1498985
23. [23] Y.-H. Chen, M.-X. Chen, and A. K. Mishra, “Subsidies under uncertainty: Modeling of input- and output-oriented policies,” Economic Modelling, Vol.85, pp. 39-56, 2020. https://doi.org/10.1016/j.econmod.2019.05.005
24. [24] A. Bossman, M. Gubareva, and T. Teplova, “Asymmetric effects of market uncertainties on agricultural commodities,” Energy Economics, Vol.127, Part B, Article No.107080, 2023. https://doi.org/10.1016/j.eneco.2023.107080
25. [25] X.-L. Tian et al., “Crop diversity facilitates soil aggregation in relation to soil microbial community composition driven by intercropping,” Plant and Soil, Vol.436, Nos.1-2, pp. 173-192, 2019. https://doi.org/10.1007/s11104-018-03924-8