Freguin-Gresh, S. d'Haese, M. & Anseeuw, W. (2012) Demythifying contract farming: Evidence from rural South Africa, Agrekon: Agricultural Economics Research, Policy and Practice in Southern Africa, 51:3.

2.3 DIRECT ACTIONS IN COMMUNITIES

2.3.2 Entrepreneurship: Capacity strengthening on economic activities

Recommendation: 32. Review contract farming as a potential approach for involving smallholders in agroindustry development, increasing employment and improving the inclusiveness of growth. Note that marginal smallholders may find better prospects as wage labourers on larger farms—including in processing of agricultural outputs—instead  of participating in improved supply chains as independent producers. Consider, however, that in some cases there is evidence that contract farming can benefit better-equipped farmers, excluding the poorest ones. Depending on project objectives, this will need to be taken into account and addressed.

Reference: Freguin-Gresh, S. d'Haese, M. & Anseeuw, W. (2012) Demythifying contract farming: Evidence from rural South Africa, Agrekon: Agricultural Economics Research, Policy and Practice in Southern Africa, 51:3.

Evidence sample: Freguin-Gresh et al (2012) argue that although contract farming generally improves the agricultural production of participants, it often does not benefit the poorest. Results show that contract farming mostly involves the better resourced, who have previously benefitted from specific development paths and public support.