This study aims to investigate the impact of contract farming (CF) on chemical input usage (fertilisers, pesticides and herbicides) in wheat farming in Haryana, India, weighing on environmental risks from unsustainable chemical input usage under CF.
The research employs an endogenous switching regression (ESR) model using data from 754 farm households, enabling a comparative analysis between contract and non-contract farmers.
The results show that farmers who adopted CF would have reduced chemical input usage by 26.8% if they did not adopt it. Conversely, non-adopters would have increased chemical input usage by 54% if they adopted CF. While CF enhances farm productivity and income, it also increases chemical input usage, posing risks such as soil fertility loss and water contamination.
The geographic focus on Haryana may limit generalisability. Reliance on cross-sectional data from a single season might not capture variability across different seasons. Future research could expand to other regions, use longitudinal data and investigate a broader range of crops.
This study addresses the overlooked topic of chemical input usage in CF research. Leveraging household data and using an ESR model provides unique comparative analysis and counterfactual scenarios. The findings contribute to understanding the environmental implications of CF and propose actionable recommendations for sustainable agricultural practices.
