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Contract Farming And Outgrower Schemes In East And Southern Africa

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  • D. Glover

Abstract

This article examines the experience of seven countries in East and Southern Africa with contract farming and outgrower schemes. In such schemes, farmers sell their crops under contract to private or public enterprises for processing or export in return for various price guarantees, inputs and services. The article identifies some of the key determinants of success or failure, evaluates performance and examines the constraints to replication. In most cases, performance in delivering services and providing income increases to farmers has been quite good, although high management costs limit the extent to which this form of organisation could be more widely applied. Looser control, relying more on price incentives and farmer participation, might lower overhead costs while developing management capability among growers.

Suggested Citation

  • D. Glover, 1990. "Contract Farming And Outgrower Schemes In East And Southern Africa," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(3), pages 303-315, September.
    • Handle: RePEc:bla:jageco:v:41:y:1990:i:3:p:303-315
    DOI: 10.1111/j.1477-9552.1990.tb00648.x
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    References listed on IDEAS

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    1. Glover, David J., 1987. "Increasing the benefits to smallholders from contract farming: Problems for farmers' organizations and policy makers," World Development, Elsevier, vol. 15(4), pages 441-448, April.
    2. Glover, David J., 1984. "Contract farming and smallholder outgrower schemes in less-developed countries," World Development, Elsevier, vol. 12(11-12), pages 1143-1157.
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    1. Deininger, Klaus & Binswanger, Hans, 1999. "The Evolution of the World Bank's Land Policy: Principles, Experience, and Future Challenges," The World Bank Research Observer, World Bank, vol. 14(2), pages 247-276, August.
    2. Rehber, Erkan, 1998. "Vertical Integration In Agriculture And Contract Farming," Working Papers 25991, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    3. Wendimu, Mengistu Assefa & Henningsen, Arne & Gibbon, Peter, 2016. "Sugarcane Outgrowers in Ethiopia: “Forced” to Remain Poor?," World Development, Elsevier, vol. 83(C), pages 84-97.
    4. Porter, Gina & Phillips-Howard[malt], Kevin, 1997. "Comparing contracts: An evaluation of contract farming schemes in Africa," World Development, Elsevier, vol. 25(2), pages 227-238, February.
    5. Sashi Sivramkrishna & Amalendu Jyotishi, 2008. "Monopsonistic exploitation in contract farming: articulating a strategy for grower cooperation," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(3), pages 280-296.
    6. Tschirley, David L. & Poulton, Colin & Boughton, Duncan, 2006. "The Many Paths of Cotton Sector Reform in Eastern and Southern Africa: Lessons From a Decade of Experience," Food Security Collaborative Working Papers 54477, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    7. Goletti, Francesco & Wolff, Christiane, 1999. "The impact of postharvest research," MTID discussion papers 29, International Food Policy Research Institute (IFPRI).
    8. Cook, Michael L. & Chaddad, Fabio R., 2000. "Agroindustrialization of the global agrifood economy: bridging development economics and agribusiness research," Agricultural Economics, Blackwell, vol. 23(3), pages 207-218, September.
    9. Mansur, Kasim & Tola, Mansur & Ationg, Romzi, 2009. "Contract Farming System: A Tool to Tranforming Rural Society in Sabah," MPRA Paper 13271, University Library of Munich, Germany.
    10. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772, Elsevier.
    11. Bellemare, Marc F. & Lee, Yu Na & Novak, Lindsey, 2021. "Contract farming as partial insurance," World Development, Elsevier, vol. 140(C).
    12. Thomas Kopp & Ashok K. Mishra, 2022. "Perishability and market power in Nepalese food crop production," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(2), pages 518-540, June.
    13. Herrmann, Raoul T., 2017. "Large-Scale Agricultural Investments and Smallholder Welfare: A Comparison of Wage Labor and Outgrower Channels in Tanzania," World Development, Elsevier, vol. 90(C), pages 294-310.
    14. Wolff, Christiane, 1999. "The Economics of Oil Palm Production in Chiapas, Mexico," Working Papers 127687, Cornell University, Department of Applied Economics and Management.
    15. Masakure, Oliver & Henson, Spencer, 2005. "Why do small-scale producers choose to produce under contract? Lessons from nontraditional vegetable exports from Zimbabwe," World Development, Elsevier, vol. 33(10), pages 1721-1733, October.
    16. Nhan, Tran Quoc & Gillette, Raulston & Yutaka, Tomoyuki & Can, Nguyen Duy, 2020. "Impact of Outgrower Scheme on Yield,Output Price,and Income: A Rice-Farm-Level Study in the Mekong Delta,Vietnam," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 61(1), pages 1-19, June.
    17. Rehber, Erkan, 2007. "A Global Overview of Contract Farming," Monographs: Applied Economics, AgEcon Search, number 259079, July.
    18. Phil Simmons, 2002. "Overview of Smallholder Contract Farming in Developing Countries," Working Papers 02-04, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    19. Karaan, Mohammad, 2003. "An Institutional Economic Appraisal Of Worker Equity Schemes In Agriculture:," 2003 Annual Conference, October 2-3, 2003, Pretoria, South Africa 19094, Agricultural Economics Association of South Africa (AEASA).
    20. Marc F. Bellemare, 2018. "Contract farming: opportunity cost and trade†offs," Agricultural Economics, International Association of Agricultural Economists, vol. 49(3), pages 279-288, May.
    21. Bellemare, Marc F. & Bloem, Jeffrey R., 2018. "Does contract farming improve welfare? A review," World Development, Elsevier, vol. 112(C), pages 259-271.
    22. Lorenzo Casaburi & Michael Kremer & Sendhil Mullainathan, 2014. "Contract Farming and Agricultural Productivity in Western Kenya," NBER Chapters, in: African Successes, Volume IV: Sustainable Growth, pages 137-160, National Bureau of Economic Research, Inc.
    23. Van Damme, Patrick, 2008. "Linking Smallholder Farmers to Commercial Sector Activities: The Case of Eastern Africa with Special Attention to Niche Commodities," BANWA: A Multidisciplinary Journal, University of the Philippines Mindanao, vol. 8(2), pages 1-12.
    24. Henson, Spencer & Masakure, Oliver & Boselie, David, 2005. "Private food safety and quality standards for fresh produce exporters: The case of Hortico Agrisystems, Zimbabwe," Food Policy, Elsevier, vol. 30(4), pages 371-384, August.

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