The Contribution of Contract Farming to Agricultural Development in Zimbabwe: A Case Study of A1 Farmers in Mashonaland East Province.

Abstract

This study is focusing on the contribution of contract farming to agricultural development in Zimbabwe. The pragmatism research philosophy and a case study research design were used. Questionnaires and focus group discussions were used to collect data, whilst data analysis was based on thematic and narrative discourse analysis. Results from the study show that contract farming is significant to agricultural development in Zimbabwe as it eases access to finance for farmers who had been incapacitated by lack of collateral to acquire capital. It also opens up guaranteed and viable markets for farmers. In addition, the use of better quality inputs and better management practices leads to improved production for the farmers. However, the study also show that contract farming has little impact on farm profits due to high interest rates, high input costs and the low bargaining power of the farmers in price determination. Thus, the little that the farmers earn is not enough to invest in savings but in capital assets like scotch carts, livestock and cars, which still fall short of the financial sector collateral requirements that mainly consists of immovable property. The study, therefore recommends that the government should restore agricultural land titles and formulate legislation to protect farmers from contractors’ unfair practices. Farmers should move away from producing commodities for red ocean markets like tobacco and produce commodities for blue ocean markets for underserved local and international markets like small grains. Banks should also be encouraged to employ savings mobilization strategies to attract longer term savings.