7/9/2010Nazia Habib-Mintz

University of Cambridge, UK

Ensuring commercial viability and sustainability of contract farming in developing countries

1.Introduction (2 pages)

A very brief introduction will be given on how globalization, privatization, and institutional capacity and quality influence agricultural factors in different developing countries. This in turn dictates the commercial viability and sustainability of contract farming (CF) schemes.

Main argument: It is difficult to find meaningful lessons of universal applicability of contract farming schemes. Rather, there is stronger evidence for context, commodity, and case specific lessons that have targeted objectives like poverty reduction or yield improvements.

Section 2 will focus on cash crop industry development and will narrow down its discussion on CF status and prospectus in development. Section 3 will discuss context, commodity, and case matters as formal and informal institutions influence the general structure of contract farming experiences within the private sector and the effects on farmers. Section 4 shares lessons learned by the Tanzanian government on recorded experiences of contract farming schemes practiced in the cashew, coffee, and jatropha production by the private sector. Finally, section 5 concludes the paper with policy recommendations.

2.Contract farming status and prospectus (5 pages)

  • Under what conditions can CF not lead to development?
  • If contracts collapse and businesses fail, who suffers the most?
  • What is known about risks to commercial viability and sustainability of CF in agroindustry?

3.Context, commodity, and case matters (3 pages)

  • How do the national and sub national regulatory and informal institutional frameworks influence the quality and sustainability of CF schemes?
  • Do contract farming schemes differ between commodities?
  • How do the terms of contract differ for edible and non-edible cash crop sectors? (%share for food, feed vs sale)

4.Brief illustration of Tanzanian experience (5 pages)

What can be learned from Tanzanian agricultural experience with CF?

Provide insights on various levels of viability and sustainability of CF observed in cashew, coffee, and jatropha production.

5.Conclusion (1 page)

General conclusion with some policy recommendations

Bibliography

Government documents

International development agency published documents

Academic journals