Contract farming, community effect, and farmer valuation of biofortified crop varieties in China: The case of high‐zinc wheat

• Published date: 01 May 2022
• Author: Jian Li,Ping Qing,Wuyang Hu,Minglai Li
• Date: 01 May 2022
• DOI: http://doi.org/10.1111/rode.12847

Rev Dev Econ. 2022;26:1035–1055. wileyonlinelibrary.com/journal/rode

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1035

© 2021 John Wiley & Sons Ltd

Received: 24 April 2020

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Revised: 18 November 2021

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Accepted: 19 November 2021

DOI: 10.1111/rode.12847

REGULAR ARTICLE

Contract farming, community effect, and

farmer valuation of biofortified crop varieties

in China: The case of high- zinc wheat

JianLi1

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PingQing1

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WuyangHu2

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MinglaiLi3,4

1College of Economics and Management,

Huazhong Agricultural University,

Wuhan, China

2Department of Agricultural,

Environmental, and Development

Economics, The Ohio State University,

Columbus, Ohio, USA

3School of Economics and Finance, Xi’an

Jiaotong University, Xi'an, China

4School of Energy and Environment,

City University of Hong Kong, Kowloon,

China

Correspondence

Ping Qing, College of Economics and

Management, Huazhong Agricultural

University, Wuhan, China.

Email: pingqingwh@163.com

Funding information

National Natural Science Foundation of

China, Grant/Award Number: 72173052,

71803058, 71561147001 and 71873050

Abstract

Biofortification is a feasible and cost- efficient approach

to reduce human micronutrient deficiency, but few

studies have investigated its economic value from the

perspective of producers. We propose an actual output-

based payment card (AOPC) method to elicit producer

valuation of biofortified high- zinc wheat in North China

Plain and assess the impacts of contract farming and

community network on their valuation. Unlike finan-

cial payments, AOPC uses actual output as the payment

vehicle. The results show that Chinese wheat producers'

valuation of the biofortified variety is featured by a dis-

persed and bimodal distribution. We find that contract

farming positively affects farmer valuation, highlighting

the role of institutional arrangement in biofortified crop

planting. We also document the existence of community

effects, which leads to similar valuation among farmers

better connected through the shared community net-

work. Further analysis reveals that contract farming and

community network effects on producer valuation are

heterogeneous between elderly and younger producers

and producers with and without young children. Our

findings shed new light on producer valuation of biofor-

tified crop planting in developing countries and provide

implications for advancing the process of crop biofor-

tification to reduce global micronutrient malnutrition.

[Correction added on 30 December 2021, after first online publication: The grant/award number of National Natural

Science Foundation of China has been corrected in this version.]

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LI et al.

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INTRODUCTION

The United Nations International Children's Emergency Fund (2018) reported that more than

50 million children under age 5years are at risk of acute malnutrition, and approximately 150

million are chronically undernourished or stunted. Micronutrient malnutrition is also a wide-

spread public health problem in many developing countries (Bonuedi etal.,2021; von Braun &

Birner,2017). The main cause of micronutrient malnutrition is the lack of variety in the diet,

more so in developing countries, that does not provide sufficient vitamins and minerals. Scientific

progress has allowed plant breeding, agronomic practices, or biotechnology to move micronutri-

ents from the soil to the seeds of staple crops (Waters & Sankaran, 2011). Biofortification (or

biological fortification) is an agriculture- based approach that breeds staple food crops for higher

micronutrient contents, which has the advantage of not needing to change the cultivation meth-

ods or requiring dietary changes in consumers (Caeiro & Vicente,2020; Shikuku etal., 2019).

Therefore, among all nutrition interventions, biofortification is considered one of the most fea-

sible and cost- efficient approaches to deliver micronutrients to needed population and has the

potential to build sustainable food systems and bridge the gap between agriculture and nutrition

(Meenakshi etal.,2010; Qaim etal.,2007).

Since 1978, China has lifted more than 600 million people out of poverty, contributing signifi-

cantly to global poverty reduction (Ministry of Foreign Affairs of the People's Republic of China

& United Nations System in China, 2015). It is a remarkable achievement in ending hunger and

accomplishing food security. However, as the largest developing country in the world, China

still has a large population that has limited access to diverse diets, especially those living in rural

areas (Huang etal.,2021). Around 64 million Chinese suffer from "hidden hunger" (micronu-

trient malnutrition) (Zhang & Wang,2009). In response, China, as in many other developing

countries, launched its biofortification program around 2004. A series of new biofortified crop

varieties have been developed, and a few of them have recently progressed to commercial plant-

ing. Despite government efforts promoting the production and supply of biofortified food, the

decision of whether to continue to plant biofortified crops is on the farmers. Ultimately, produc-

ers need to be convinced that planting biofortified crops is an advantageous option compared to

planting conventional crops. This motivates our research to investigate the economic value of

biofortified crops from the perspective of producers.

While a large number of existing studies have investigated the health impacts of and con-

sumer attitude toward biofortified food (Birol etal.,2015; De Groote et al., 2011; De Steur et al.,

2010, 2015; Huang etal.,2021; Lawal et al.,2021; Stein et al.,2005), much less effort is on un-

derstanding producer valuation on biofortified crop planting in developing countries. One may

assess producer valuation of a biofortif ied crop variety through their willingness to pay (WTP)

for biofortified crop seeds (Maredia et al., 2019). However, like in many developing countries,

seeds of biofortified crops are subsidized in China to accelerate planting. In such a scenario, the

KEYWORDS

biofortification, contract farming, modified actual output- based

payment card, producer valuation, social network

JEL CLASSIFICATION

I19; Q15; Q56