Challenges of contract farming among small-scale commercial vegetable farmers in Eastern Cape South Africa

Abstract

This research investigated the effectiveness of contract farming in commercialisation of small-scale vegetable farmers. The broad objectives of the study were to investigate the agri-business challenges inherent in contract farming and the government incentives required by agribusiness firms to engage small-scale vegetable farmers in contract farming programmes. A sample of 47 small-scale farmers and 15 agribusiness firms involved in contract farming production of vegetables were selected in Sarah Baartman district municipality in the Eastern Cape province of South Africa. Focus group discussions and in-depth interviews were chosen as data collection tools to identify the agribusiness challenges inherent in contract farming relationships between the parties. Findings from the study revealed that the contract farming environment in the area surveyed was highly polarised and characterised by a fundamental conflict of interest between agribusiness and farmers. Among the divergent key factors inhibiting contract farming engagement were a lack in terms of quality seeds, trust, entrepreneurial skills and formal contract agreements. The study recommends a collaborative partnership between private firms and government, with state support through revised policies and development programmes. These amendments are crucial to enhancing the engagement of small-scale vegetable farmers in lucrative agri-food chains.

Keywords: agribusiness, commercialisation, contract farming, small-scale farmers