Effectiveneness of a contract farming arrangement : a case study of tobacco farmers in Mazowe district in Zimbabwe
Thesis (MDF)--Stellenbosch University, 2014.
The welfare maximisation effect of contract farming is well documented (Minot, 1986) and the scheme is endorsed by the New Economic Partnership for Africa’s Development (NEPAD) as a panacea for alleviating poverty in Africa and for the development of agriculture in general. In this research assignment an evaluation of contract farming arrangement in the Mazowe district of Zimbabwe sought to establish the effect of the arrangement using a comparative study of contract and non-contract farmers. Using data from the Tobacco Industries and Marketing Board (TIMB) an analysis of variance was undertaken to determine if there was a significant difference between the two groups in terms of prices received for tobacco and production. A survey was conducted to test the characteristics of the two groups to help explain the findings. The results show that contract farmers performed better than non-contract farmers in terms of production, contract farmers had access to inputs, extension services and finance which could explain their better performance. However, there was no significant difference in the prices received by the farmers. The difference in performance can be explained by access to farming resources suggesting that provision of sound infrastructure and public goods could further improve the livelihoods of farmers, both contract and non-contract. Contract farmers only accessed operational finance without infrastructure and patient finance to back up their agricultural production. Government can improve agricultural production through better policies on land tenure, contract enforcement and risk management framework issues which were found lacking.