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Smallholders and contract farming at crossroads : the case of the oil palm sector of Ghana Vabi Vamuloh, Vilbert

Abstract

There is a general consensus among development experts that developing economies can achieve key development goals such as poverty reduction, agrobiodiversity conservation and improved food security through supporting smallholder agricultural systems including their enhanced participation in contract farming. But, engaging smallholders in contract farming has been a major limitation of contract farming programs globally. This dissertation seeks to enhance our understanding about the factors that influence smallholder participation in contract farming. The extant literature on smallholder participation in contract farming is disparate and gives conflicting findings within and across different parts of the world. To address this issue, this research systematically reviews extant research on the factors behind smallholder participation in farming programs. Smallholder demographics, farm structure, smallholder assets and attitudes are identified as the main factors for smallholder participation in contract farming. The review also finds that smallholders with more assets and formal land tenures are likely to participate in contract farming. Furthermore, deploying the Theory of Planned Behaviour as an overarching analytical framework, this research examines the role of attitudes, subjective norm and perceived behavioural control in smallholder non-participation (abstaining from and quitting contract farming) and participation decisions in contract farming in the context of the Ghanaian oil palm sector. Three focus group discussions and a total of thirty-nine semi-structured interviews were conducted of which fourteen were with non-participants (nine with farmers who abstain from it altogether and five with those who quitted over time) and twenty-five participants (current contracting farmers). The results suggest unfavorable contract requirements lead to smallholders abstaining from contract farming while perceived lack of equity lead to smallholders quitting from contract farming. The research also finds that access to input and output markets is an important determinant of smallholder participation in contract farming. In addition, observed benefits and government policies also enhance smallholder participation in contract farming. Overall, the TPB partially explains the non-participation and participation decisions of farmers. These results suggest important differences exist between non-participants and participants in terms of their underlying motivations. Such differences must be considered for successfully designing contract farming programs that could more effectively improve smallholder livelihoods.

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Attribution-NonCommercial-NoDerivatives 4.0 International

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