Charles Dhewa
Contract farming has been a central part of Zimbabwean agriculture for decades. There are as many advantages as there are disadvantages of contract farming. Examining both perspectives will empower farmers to make better choices in minimising the disadvantages and maximising the advantages of contract farming.Advantages
1. Easy access to inputs by farmers and assured access to commodities by contract companies.
2. Guaranteed market for farmers. This gives farmers the comfort level to be able to focus on what they are good at (farming).
3. Farmer access to cutting-edge production knowledge from contract companies. In order to get good quality commodities, contract companies provide the best varieties or breeds and advisory services from production all the way to marketing.
For instance, farmers who produce chickens as out-growers to Irvines’ Day Old Chicks have access to excellent genetics and knowledge which makes them better farmers.
4. Enormous opportunities for farmers to transfer good agricultural practices to other commodities outside contract arrangements. Contract farming inculcates a certain level of attention to detail.
Farmers who have participated in tobacco, horticulture or cotton production under contract arrangements have been able to transfer those practices to other commodities including livestock.
5. Rural employment creation through supporting the industrialisation of growth points. Rural business centres like Gokwe and Muzarabani owe their growth and expansion to cotton production which has created employment and lured associated businesses such as welding, supermarkets and hotels.
Organising cotton production through contract arrangements has made this possible by surfacing the capacity of rural areas and satisfying farmers’ ambitions.
6. Supporting agro-processing and manufacturing. Most manufacturing businesses such as oil processing, flour milling, sugar milling, beer brewing, beef canning and maize milling have been anchored on organised contract arrangements. Besides creating employment through value addition, the manufacturing sector has been able to pay tax to the Government, thus building the national revenue base.
Disadvantages
1. While contract farming tends to guarantee a market, contractors keep prices very low in order to maximise profit.
For instance, many tobacco farmers have been complaining that contract agreements are designed in ways that do not allow farmers to completely break out of the poverty cycle.
2. Farmers often don’t have an opportunity to speak to the final consumer. For instance, farmers participating in contract production of peas for export do not have access to the final consumers in foreign countries so that they get feedback on how to improve.
3. Contract companies have the final say on quality and can reject ‘sub-standard’ commodities which they can allocate a lower grade. Farmers will just accept because there is nothing to compare with.
4. Contract arrangements reinforce a dependency syndrome. It is not easy for farmers to get out contract arrangements. Most tobacco farmers are locked in contract arrangements in ways that make it impossible for them to be self-reliant. Cotton farmers have been in the same situation for years. Ideally, after three farming season, a farmer should be able to stand on his own legs.
5. Most contract arrangements promote monoculture. Producing crops like tobacco and cotton do not leave farmers with enough energy or time to diversify their production.
Contract farming gives easy access to inputs by farmers and assured access to commodities by contract companies
6. Contract arrangements tend to have a very negative environmental footprint. Chemicals used in cotton and tobacco production have a highly negative environmental impact.
Comparing the quality of water between contract farming areas where chemicals and fertilisers are used and those where there is no intensive commercial contract production can reveal that the quality of water in non-contract areas is much better. Soils have also been degraded in most cotton and tobacco production areas.
Not to mention, the destruction of roads by big haulage trucks hauling cotton from Gokwe and other areas to urban areas. Most contract companies are reluctant to re-invest back into farming communities in meaningful ways. Lead farmers are often rewarded with a few inputs, T-shirts and other small items.
Rather than supporting local rural sports, most cotton companies have been sponsoring elite urban sports like Rugby and Cricket which are not found in rural areas.
Evidence-based as opposed to popularity-based decisions
One way farmers can minimise the negative impact of contract farming is practising leadership by experiment.
This is about setting up experiments that allows farmers to gather real-world evidence on their choices rather than embracing contract farming as the only option.
Empowering farmers to lead by experimentation enables the best ideas to prove themselves rather than be stuck with contract arrangements. Instead of building consensus around contract farming, farmers build consensus for a particular experiment, which can yield trustworthy results. Leadership by experimentation results in evidence-based decisions as opposed to popularity-based ones.
To maximise synergy among farmers, a co-creative agricultural group should include participants who understand the problem from all the relevant perspectives. The more complex the problem, the greater the number and diversity of stakeholders who should be included in the process.
A broader range of perspectives and ways of thinking allow leads to more innovative solutions that address underlying factors. Contract farming can be too narrow for complex agricultural challenges that farmers are facing in a changing climate. Farmers should approach agriculture as collaborative problem-solving and experimentation where they all experience the feeling of co-creation.
Farmers standing on
their dignity
Many farmers are now dying to get out from under the umbrella of being beneficiaries of any contract arrangement or charitable operation which does not give them concrete leverage. They want to be sure they are not begging for charity.
They are trying to understand agriculture as relating to each other without having to use money all the time. It should be about recognising each other as who they are and not by what they have.
As a result of not having grasped the complexities of agriculture, contract companies and development actors continue to coming into farming communities with simple solutions. Most simple solutions have outlived their usefulness.
Charles Dhewa is a proactive knowledge management specialist and chief executive officer of Knowledge Transfer Africa (Pvt) (www.knowledgetransafrica.com) whose flagship eMKambo (www.emkambo.co.zw) has a presence in more than 20 agricultural markets in Zimbabwe. He can be contacted on: [email protected] ; Mobile: +263 774 430 309 / 772 137 717/ 712 737 430.