Institutional Models for Accelerating Agricultural Commercialization: Evidence from Maize, Cotton and Horticulture

Although a majority of Zambians work in agriculture, only a small minority of smallholders succeed in transitioning to high-productivity, high-value commercial agriculture. Only 20% of cotton farmers and less than 5% of maize and horticulture farmers succeed as top-tier commercial growers (Table 1). By tracing the long-term agricultural trajectories of successful commercial cotton, maize and horticulture farmers, this study identifies two broad agricultural pathways out of poverty. The low road, exemplified by cotton production, involves a two-generation transition via low-value but with well-structured markets. The more restrictive high road, epitomized by horticulture production, offers a steeper ascent, enabling prosperity within a single generation, but requires commensurately higher levels of financing, management and risk. Personal characteristics that define successful commercial smallholders include: • strict discipline; • treatment of farming as a business; • good management of crop production, labor and finances; • a strong propensity to save; and • willingness to invest in their children’s education. Key institutions affecting smallholder performance include: • management and marketing support provided by the cotton companies to their contract farmers; • land allocation systems, particularly those permitting land consolidation in communal areas and smallholder transitions to farm blocks in state lands; • savings systems (both financial and livestock-based) that permit successful smallholders to rebound from period shocks.