Who Benefits in Contract Farming? A Perspective of Sunflower and Sorghum in Central Tanzania

Abstract

The major aim of contract farming is to create ready market to farmers, provide agricultural inputs and agricultural extension services and improve productivity to farmers and contracting firms. Nevertheless, it is debatable as to whether smaller holder farmers or it is big companies that benefit from contract farming i.e benefit distribution in contract farming has not been well established. This study is an attempt to establish whether the benefits accrued under contract farming are fairly distributed among the farmers’ categories and companies’ central part of Tanzania. A cross sectional design was adopted for the study purposes. A total of 200 farmers were randomly sampled and surveyed at Kongwa District in Dodoma region. Multiple methods of data collection were used ranging from household survey, Focus Group Discussion (FGDs) and Key Informant Interviews. The study found positive contribution of contract farming in productivity and income. Nevertheless, pricing arrangement in contracts were questionable. Mistrust of who gets what in the contracts prevail in the study area. The study recommends improvement in governance of contracts for better performance.

Keywords: Agriculture, Contract Farming, Productivity and Agricultural markets