Publication: An Analytical Toolkit for Support to Contract Farming
Loading...
Published
2014-05
ISSN
Date
2014-12-31
Author(s)
Editor(s)
Abstract
Over the past century or so, a wide assortment of pre-harvest agreements, joint ventures, deals, and pledges that can be termed contract farming have been brokered between farmers and buyers. During the 1980s and 1990s, contract farming was frequently criticized as a potentially exploitative arrangement, which favored the more powerful buyer and left the small-scale farmer and the environment vulnerable to abuse. More recently, there is renewed interest from policy makers and their development partners in contract farming as a means of leveraging the recent wave of large-scale investment in land and agriculture to include small-scale farmers and to link them to new market opportunities. The establishment of contract farming becomes a means to link small-scale farmers to markets, which may otherwise be inaccessible for reasons of distance, standards, processing, or any of the other disconnections and impediments that hold them back. However, there have been few attempts to evaluate donor-supported contract farming projects, either financially or economically, or to measure their inclusiveness and their impact in the community. This document aims to provide a task team leader with tools for a critical evaluation of projects promoting contract farming schemes before, during, and after the life span of the project. This toolkit has three objectives: provide guidance on what kinds of contract farming schemes work well, and in what circumstances (the best practice function); provide guidance on how to analyze inclusive contract farming schemes in order to identify those with a good chance of success and sustainability - the right horse to back (the diagnostic function); and provide a framework for applying socio-economic and financial analysis to operations that support such schemes (the cost-benefit function).
Link to Data Set
Citation
“World Bank Group. 2014. An Analytical Toolkit for Support to Contract Farming. © http://hdl.handle.net/10986/21058 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Priorities for the Development of Smallholder Agriculture in Swaziland(Washington, DC, 2011-06-27)The purpose of this policy note is to contribute to an understanding of the factors that combine to constrain the development of smallholder agriculture in Swaziland. It seeks to shed light on why, despite being well-endowed in land and water resources, and despite having a climate that is generally favorable for the production of crops and livestock, Swaziland is obliged to import substantial amounts of food to feed the population. Also, why, in spite of the significant investments that have made in the agricultural sector and in spite of the extensive farming experience of the 70 percent of the population that lives off the land, smallholder farm productivity and production have been declining over time. Finally, the policy notes identify priority areas where strategic interventions are needed to turn things around and get smallholder agriculture going as a driver of growth and poverty reduction. This note provides an overview of smallholder agriculture in Swaziland, identifes constraints that may be contributing to poor performance in the smallholder sector, and evaluates technological options that could improve productivity of smallholder farmers. In addition, it summarizes the findings of a recent review of public spending on agriculture, undertaken to identify trends and patterns in agricultural spending over the last five years and to determine whether the government's budget allocations have been effective in supporting the intended development of smallholder agriculture. After addressing these questions, the policy note points to entry points where future government interventions could help to reverse the current negative trends.Publication Agribusiness Indicators(World Bank, Washington, DC, 2012-12)Agriculture and agribusiness play an important role in the Zambian economy, contributing around 20 percent of gross domestic product (GDP) in recent years and about 12 percent of national export earnings. Agriculture employs nearly 70 percent of the labor force and remains the main source of income and employment for most of the people living in rural areas. The objective of the Zambia agribusiness indicators (ABI) country report is to examine factors that have affected agricultural productivity, market access, and the policy environment for agriculture in Zambia. This report presents findings of a data collection exercise carried out to compile a set of pilot ABI for Zambia. The pilot indicators presented are based on a review of the literature, government statistical bulletins, and primary interviews in the seed, fertilizer, mechanization, agricultural finance, and transport subsectors. The resulting indicators are presented in matrix form, together with notes indicating the specific data source (or sources) used for each indicator. A set of questionnaires was developed for this part of the exercise based on guidelines. Perception indicators on the quality of road infrastructure and other transport sector issues were added to supplement the checklist guidelines. The anticipated impact of the presentation of country performances will be to raise the competitiveness of African agriculture by bringing into sharper focus measures of how individual countries are transitioning towards a more commercial agriculture. This report consists of following seven chapters: chapter one gives introduction; chapter two presents access to and use of improved seed; chapter three focuses on fertilizer access and availability; chapter four focuses on access to farm machinery and tractor hire services; chapter five presents access to agricultural and agri-enterprise finance; chapter six gives cost and efficiency of transport in Zambia; and chapter seven presents policy and enabling environment for agribusiness development.Publication Contract Farming(World Bank, Washington, DC, 2014-10)Contract farming involves production by farmers under agreement with buyers for their outputs. This arrangement can help integrate small-scale farmers into modern agricultural value chains, providing them with inputs, technical assistance, and assured markets. Critics contend that contract partners may subject farmers to abuses. The literature shows that in fact contract farming can raise farm income, but mainly for high-value crops. It also indicates that in many cases firms are willing to work with small farms. This note confirms that conflicts are common between buyers and farmers, and that alternative dispute resolution methods may help resolve them.Publication Agribusiness Indicators(World Bank, Washington, DC, 2012-11)Agriculture in Tanzania accounts for 28 percent of the country's Gross Domestic Product (GDP) and employs 80 percent of its labor force. The sector is also an important source of export revenues. The data and findings presented in this report provide a summary of the performance of the agriculture sector in Tanzania using a set of indicators covering six areas. These are: 1) access to and availability of certified seed; 2) availability of and access to fertilizer; 3) access to farm machinery, particularly tractor hire services for land preparation; 4) access to agricultural and agro-enterprise finance; 5) the cost and efficiency of transporting agricultural commodities; and 6) measures of policy certainty and uncertainty as perceived by private investors and the effects these have on the enabling environment for producers and agribusinesses. The Agribusiness Indicators (ABI) team conducted interviews with Government agencies, private firms (fertilizer importers, seed companies, tractor importers and distributors, transporters), commercial banks, farmer-based organizations, donors, and Non Governmental Organizations (NGOs). The ABI program is pilot testing an initial set of indicators on the ease (or difficulty) of operating agribusinesses in African countries. The indicators are used to assess whether the countries have an enabling environment that is conducive to agribusiness investment, competitiveness, and ultimately agriculture-led growth.Publication Zambia - Commercial Value Chains in Zambian Agriculture : Do Smallholders Benefit?(World Bank, 2009-06-01)Agriculture and agroprocessing are important in Zambia's economy, representing more than 40 percent of gross domestic product (GDP) and contributing about 12 percent of national export earnings. Agriculture employs some 67 percent of the labor force and supplies raw materials to agricultural industries, which account for some 84 percent of manufacturing value-added in the country. Smallholder agriculture dominates the rural economy. It provides livelihoods for the overwhelming majority of rural households. The commercialization of smallholder agriculture is an important element of Zambia's strategy to increase economic growth in an equitable manner and diversify smallholder agriculture. This study therefore asks: 'do Zambian smallholders benefit from greater participation in value chains?' It provides an evidence-based analysis of the benefits and constraints associated with smallholders' integration into specific commercial value chains. The study also investigates whether the benefits of participating in these value chains can be increased for smallholders and provides corresponding policy and investment recommendations.
Users also downloaded
Showing related downloaded files
Publication Global Economic Prospects, January 2025(Washington, DC: World Bank, 2025-01-16)Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.Publication Expanding Opportunities: Toward Inclusive Growth(World Bank, Washington, DC, 2023-04-04)South Asia’s outlook is shaped by both good and bad news in the global economy. Lower commodity prices, a strong recovery in the services sector, and reduced disruptions in value chains are aiding South Asia’s recovery but rising interest rates and uncertainty in financial markets are putting downward pressure on the region’s economies. Countries in South Asia, especially those with large external debt, face difficult tradeoffs as they respond to these pressures. Growth prospects have weakened, with large downside risks in most countries given limited fiscal space and depleting foreign reserves. Going forward, broad reform programs, including a sustainable fiscal outlook, are needed to put South Asia on a more robust and inclusive growth path. Inequality of opportunity, which is higher in South Asia than in other regions of the world, is both unfair and inefficient. Reducing inequality of opportunity and increasing economic mobility will help broaden countries’ tax base and boost support from the population for the critical reforms.Publication World Development Report 2017(Washington, DC: World Bank, 2017-01-30)Why are carefully designed, sensible policies too often not adopted or implemented? When they are, why do they often fail to generate development outcomes such as security, growth, and equity? And why do some bad policies endure? This book addresses these fundamental questions, which are at the heart of development. Policy making and policy implementation do not occur in a vacuum. Rather, they take place in complex political and social settings, in which individuals and groups with unequal power interact within changing rules as they pursue conflicting interests. The process of these interactions is what this Report calls governance, and the space in which these interactions take place, the policy arena. The capacity of actors to commit and their willingness to cooperate and coordinate to achieve socially desirable goals are what matter for effectiveness. However, who bargains, who is excluded, and what barriers block entry to the policy arena determine the selection and implementation of policies and, consequently, their impact on development outcomes. Exclusion, capture, and clientelism are manifestations of power asymmetries that lead to failures to achieve security, growth, and equity. The distribution of power in society is partly determined by history. Yet, there is room for positive change. This Report reveals that governance can mitigate, even overcome, power asymmetries to bring about more effective policy interventions that achieve sustainable improvements in security, growth, and equity. This happens by shifting the incentives of those with power, reshaping their preferences in favor of good outcomes, and taking into account the interests of previously excluded participants. These changes can come about through bargains among elites and greater citizen engagement, as well as by international actors supporting rules that strengthen coalitions for reform.Publication World Development Report 2008(Washington, DC, 2007)The world's demand for food is expected to double within the next 50 years, while the natural resources that sustain agriculture will become increasingly scarce, degraded, and vulnerable to the effects of climate change. In many poor countries, agriculture accounts for at least 40 percent of GDP and 80 percent of employment. At the same time, about 70 percent of the world's poor live in rural areas and most depend on agriculture for their livelihoods. World Development Report 2008 seeks to assess where, when, and how agriculture can be an effective instrument for economic development, especially development that favors the poor. It examines several broad questions: How has agriculture changed in developing countries in the past 20 years? What are the important new challenges and opportunities for agriculture? Which new sources of agricultural growth can be captured cost effectively in particular in poor countries with large agricultural sectors as in Africa? How can agricultural growth be made more effective for poverty reduction? How can governments facilitate the transition of large populations out of agriculture, without simply transferring the burden of rural poverty to urban areas? How can the natural resource endowment for agriculture be protected? How can agriculture's negative environmental effects be contained? This year's report marks the 30th year the World Bank has been publishing the World Development Report.Publication Poverty, Prosperity, and Planet Report 2024(Washington, DC: World Bank, 2024-10-15)The Poverty, Prosperity, and Planet Report 2024 is the latest edition of the series formerly known as Poverty and Shared Prosperity. The report emphasizes that reducing poverty and increasing shared prosperity must be achieved in ways that do not come at unacceptably high costs to the environment. The current “polycrisis”—where the multiple crises of slow economic growth, increased fragility, climate risks, and heightened uncertainty have come together at the same time—makes national development strategies and international cooperation difficult. Offering the first post-Coronavirus (COVID)-19 pandemic assessment of global progress on this interlinked agenda, the report finds that global poverty reduction has resumed but at a pace slower than before the COVID-19 crisis. Nearly 700 million people worldwide live in extreme poverty with less than US$2.15 per person per day. Progress has essentially plateaued amid lower economic growth and the impacts of COVID-19 and other crises. Today, extreme poverty is concentrated mostly in Sub-Saharan Africa and fragile settings. At a higher standard more typical of upper-middle-income countries—US$6.85 per person per day—almost one-half of the world is living in poverty. The report also provides evidence that the number of countries that have high levels of income inequality has declined considerably during the past two decades, but the pace of improvements in shared prosperity has slowed, and that inequality remains high in Latin America and the Caribbean and Sub-Saharan Africa. Worldwide, people’s incomes today would need to increase fivefold on average to reach a minimum prosperity threshold of US$25 per person per day. Where there has been progress in poverty reduction and shared prosperity, there is evidence of an increasing ability of countries to manage natural hazards, but climate risks are significantly higher in the poorest settings. Nearly one in five people globally is at risk of experiencing welfare losses due to an extreme weather event from which they will struggle to recover. The interconnected issues of climate change and poverty call for a united and inclusive effort from the global community. Development cooperation stakeholders—from governments, nongovernmental organizations, and the private sector to communities and citizens acting locally in every corner of the globe—hold pivotal roles in promoting fair and sustainable transitions. By emphasizing strategies that yield multiple benefits and diligently monitoring and addressing trade-offs, we can strive toward a future that is prosperous, equitable, and resilient.