| Abstract | This paper firstly treats contracts as the combinations of contractual arrangements, and puts forward the point that smallholders decide to sign a contract or not depend on whether the contractual arrangements can satisfy their preferences. Then we use choice experiment to investigate contractual arrangements, smallholders’ preferences and their relationships. Based on the data collected among fruit farmers in Dangshan County, Anhui Provence, and the results of mixed logit model, we find that: There is a general preference for marketing options that involve a contract, and signing a contract with farmer cooperatives is much more preferred by smallholders to that with leading firms. Besides, offering services, such as technical assistance, market information and inputs provision cannot increase farmers’ utilities. Despite all that, farmers’ preferences for signing a contract and the arrangements mentioned above are heterogeneous since their infrastructure available, risk attitudes and labor endowments are different. Additionally, prearranging prices could impede participation of smallholders in contract transaction, yet payment in advance and protecting price do not matter. The investigation of smallholders’ preferences and their heterogeneity can provide reference for contracting parties to design contract terms according to smallholders’ preferences. Furthermore, this paper provides a new interpretation for farmers’ behavior of signing or breaking contracts. |