Nairobi — As African farmers struggle with unpredictability caused by climate change, some are looking into contract farming, which involves growing a certain crop for a price set in advance.
About 400 people attended the International Conference on Contract Farming in Nairobi this week to learn more about the practice.
Peris Wanjiku, the conference director, said such agreements can help solve the challenges that many smallholder farmers face in Africa.
“It’s always important to farm with a plan. I believe it’s not enough to simply plant a crop, whatever it is, without knowing where it will end up,” Wanjiku said. “Farmers should know beforehand what to grow and where to sell. This is why contract farming is so important, as it provides the framework for certainty and sustainability.
“But it’s not only about the traditional farmer. I believe we can extend the benefit of contract farming to those who may not be farmers themselves right now, but they own a piece of land.”
Experts say the growing interest in contract farming is associated with increasingly complicated systems in food production, marketing and distribution, which has made it difficult for farmers to meet consumers’ demands.
Contract farming, experts say, is an instrument that manages and reduces production risks for both parties.
Wilson Milito Ole-Rampei, a vegetable farmer in Kenya, is attending the conference and is optimistic that the practice would help him.
“I will benefit because if, for example, I am growing vegetables, we will arrange with them to get a market. They will give me their technical advice, then our arid land will be used. Because of [a] shortage of rain, we will do irrigation. I would have knowledge of what I am growing,” Ole-Rampei said.
An economist for the U.N.’s Food and Agriculture Organization, Lan Li, said contract farming is often a good deal for small-scale farmers.
“It sets the agreements on what products to produce, quantity, and price,” Li said. “As such, it helps secure more stable income and better production planning for producers. It can improve access to inputs for small-scale holder farmers, technical assistance training, and financing solutions.”
African farmers have seen reduced harvests due to global warming and drought. For many, a lack of knowledge and skills also contributes to low food production.
In areas where farmers can produce enough food, they sometimes face obstacles such as bad roads or insecurity that prevent them from getting to market.
Carole Kariuki, head of the Kenya Private Sector Alliance, said the private and public sectors need to collaborate to improve the agriculture sector.
“The private sector is doing its best. It’s filling that gap where it can, but we cannot do it all, and we need the government to be able to go back and say we can get agriculture extension officers helping out small farmers and all the farmers in the country. Contract farming holds immense potential to transform African agriculture,” she said.
Contract farming can have drawbacks, such as making farmers less able to sell to alternative buyers when produce prices increase. In addition, there are environmental risks from growing only one crop for a long time.
Buyers, meanwhile, can face high transaction costs from contracting with many farmers.
But Kariuki believes the benefits outweigh the risks. She called contract farming a model to lift up small-scale farmers, boost food production, and drive sustainable growth.
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