Contract farming: Partnerships for growth

Contract farming has been in existence for many years as a means of organizing the commercial agricultural production of both large-scale and small-scale farmers. Interest in it continues to expand, particularly in countries that previously followed a central planning policy and in those countries that have liberalized marketing through the closing down of marketing boards.

This guide describes in detail the general modus operandi, internal functions and monitoring mechanisms of contract farming. It aims to provide advice to managers of existing contract farming companies on how to improve their operations and to companies that are considering starting such ventures on the preconditions and management actions necessary for success. It also gives guidance to government officials seeking to promote new contract farming operations or monitor existing operations.

The advantages for farmers are clearly explained and also the problems they face. Different models of contractual arrangements are described, e.g., centralised, nucleus estate, multipartite, informal and intermediary, and contract formats and specifications are reviewed. Advice is also provided on coordinating production, managing the agronomy and farmer-management relations.

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