To modernize agricultural value chains, some governments subsidize contract prices paid to farmers by private firms to encourage them to adopt contract farming. The impact of price-subsidized contracts on farmers' incomes has not yet been evaluated. To help fill this gap, we evaluated the impact of a contractual arrangement with a subsidized sales price implemented by a tomato cannery in Algeria. Our results showed that the arrangement increased profits by securing outlets and sales prices. The success of the Algerian intervention lies in generating a price premium and in combining public financial capacity and private governance of the contractual scheme.