Contract farming a 2-edged sword

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CONTRACT farming has brought both relief and headaches to farmers, particularly those specialising in tobacco and cotton. Some tobacco farmers who spoke to The Patriot felt that the practice benefited the contractor more than the farmer. A survey carried out by this paper revealed that farmers welcomed the contracts that offered them inputs, but cited side-marketing as a major concern. The contract pricing structure inevitably drove some farmers to breach their contracts. Vengai Kampinya of Aijapo Farm in Chegutu said he had benefited in terms of inputs. “I remember I was uable to raise working capital to plant cotton, but through contract farming I produced about nine bales despite the drought,” he said. “I did sign the contract, but at first I did not really understand it. “The problem, however, comes when they deduct the input costs and I remember threatening never to engage into contract farming again. During the early 1990s, communal farmers had limited access to loans. However, most communal farmers entered into contract farming without reading the small print. Some ended up losing their livestock and household goods. Simon Magadzire of Gokwe said contractors sometimes offered very low prices, leading farmers to engage in side marketing. An extension officer who declined to be named said contract farming guaranteed a ready market for crops. “Most people who enter into contract farming grow cotton or tobacco and these are not staple crops. Once you fail to secure a market, you incur a huge loss,” he said. “The prices of these crops are not regulated like maize and there are very few buyers and the auction system makes it difficult to market them elsewhere.” Former white commercial farmers benefited from contract farming which agricultural experts said had more returns on a large scale. Collateral constraints, however, have made it impossible for thousands of communal farmers to access loans on a commercial scale.

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