Contract farming and hog farmers’ income: evidence from a microsurvey in rural China

Contract farming constitutes a pivotal institutional mechanism in modern agri-food value chains, yet its distinct socioeconomic dynamics in livestock systems—fundamentally diverging from those of crop-based models—remain critically understudied, particularly regarding producer-level income distribution effects. This study aims to fill this gap by investigating the effects of contract farming on the income of pig farmers, utilizing survey data from 969 pig farmers in Jiangsu Province, China. An endogenous switching regression model is applied to address potential selection bias, while a counterfactual framework is used to measure the effect sizes. The findings reveal that contract farming generally increases pig farmers’ income, although the magnitude of the effect varies by income group. Specifically, while contract farming significantly benefits low-income farmers, it reduces the income of high-income farmers. Mechanistically, contract farming improves income by boosting productivity, encouraging the adoption of intelligent technologies, and alleviating financing constraints. These findings provide important policy insights for promoting innovations in contract farming systems, ensuring stable pig production, and supporting the sustainable development of the livestock sector.