Contract farming has been considered a new hope to instil dynamism in third world agriculture. However, there remains serious concern whether small peasants will be able to benefit from this system since buyers may often be a single large or at most, few large corporations, a typical case of monopsony. In this paper we question the basis of the fears that are often raised in the literature. A clear analytical approach to understanding the (economic) meaning of monopsony helps us articulate a strategy for grower cooperation that could effectively deal with monopsony power in contract farming systems.
S. Sivramkrishna and Dr. Amalendu Jyotishi, “Monopsonistic exploitation in contract farming: Articulating a strategy for grower cooperation”, Journal of International Development, vol. 20, no. 3, 2008.