AGRIBUSINESS CHALLENGES TO EFFECTIVENESS OF CONTRACT FARMING IN COMMERCIALIZATION OF SMALL-SCALE VEGETABLE FARMERS IN EASTERN CAPE, SOUTH AFRICA

Abstract

The study investigated the key factors that influ- ence small-scale vegetable farmers’ participation in contract farming arrangements. A sample of 70 small-scale vegetable farmers and 15 key informants of agribusiness firms involved in contract farming production of vegetables were selected in Amathole and Sarah Baartman (formerly Cacadu) district municipalities in the Eastern Cape province of South Africa. Focus group discussions and in-depth interviews were chosen as data collection tools to identify the factors that influence small-scale vegetable farmers’ participation in contract farm- ing arrangements with agribusiness firms. The data was ana- lyzed using open multi-stage coding with an inductive frame- work approach. Atlas.ti was used to sort and organize data. The findings indicated availability of farm assets, hydrologi- cal conditions, farming skills and distance of producer to the markets as key determinants of contract farming participation. The use of unmarketable cultivars, inappropriate agricultural practices and inconsistent supply in quality and quantity of vegetables were found to be bottlenecks to contract participa- tion. The study recommends a more meaningful state support and incentives for agribusiness firms; otherwise, growth of small-scale farmers in contract farming is unlikely because of the financial implications for private sector companies.