Increasing the benefits to smallholders from contract farming: Problems for farmers' organizations and policy makers

Development of business capacity and organization of commercial business of farmer based organizations in the northern intervention zone in Ghana: A case study of nine-farmer based organizations

“…These challenges were similar to those facing farmers in extension studies reported in literature [13][14][15]18]. Notably, technologies adoption by poor farmers [12] and farm innovations [11] of well institutional farmer organizations [21] often increases their production levels gear towards human energy requirement [20].…”

“…Generally, lack of technical information for farmers, which is hampering crop production, had been observed by different authors [5,[9][10][11][12]. Similarly, a typical information and signing of contract farming assist in reduction of transactions costs caused by market limitations and creates better environment to integrate primary producers with marketers and agro-industries [13][14][15][16]. Lack of contract denies farmers' assess to appropriate market information, technology, inputs, credit facilities and in some instances legal expertise and insurance [15][16][17][18].…”

Farmers, Markets and Contracts: Chain Integration of Smallholder Producers in Costa Rica

“…The potential role of contract farming is sometimes considered attractive as a mechanism for incorporating small and low-income farmers into the open-market economy (Glover 1984, Key andRunsten 1999). In addition, contracts are usually considered as a device for reducing risk and as a strategy for guaranteeing continuous supply (Glover 1987, Grosh 1994. This is particularly important during the initial phase of nontraditional agro-export production, when contracts provide farmers with the security for enabling the necessary investments.…”

“…Contracts can be characterized as 'agreements between farmers and firms -either verbal or written -specifying one or more conditions of production and marketing of the farmer's crop' (Glover 1984). For different types of market failures, contract farming may be a welfare-improving governance device (Schejtman 1994, Grosh 1994, Key and Runsten 1999.…”

Contract farming risks: A quantitative assessment

“…Encouraging smallholders to shift to outgrower schemes of high-value crops may increase their income and may improve their economic welfare, but these arrangements have to be analysed by sensitive and in-depth evaluations. In other words, high-value crops may not necessarily translate into high farm profits (Tinsely, 2010) because of potential agricultural risks that may result in high variability of returns for farmers (Glover, 1987;Deininger & Olinto, 2000;Ponte, 2001). Langmead (2005) observed that the variability in rainfall, prices, yields and contracts is important to the sustainability of the paprika value chain in Zambia, but he did not quantitatively show how these risks could affect the viability of smallholder farmers and other players in the value chain.…”