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Keywords: smallholder farming; agricultural value chains; socio-economic transformation
In recent years, contract farming has been seen to play a significant role in addressing market failure, market entry barriers, and transaction costs for smallholder farmers' participation in the modern agricultural value chain (AVC).
In South Africa, preliminary evidence has shown contract farming to be effective in overcoming some of these economic and institutional challenges inhibiting smallholder farmers' participation in modern AVC. However, participation in contract farming by smallholder farmers remains marginal, averaging 2.5%. What could be contributing to this low adoption?
This four years funded WPE project looks at the conditions under which farmers may enter into contract farming agreements and, if they do, what the expected impacts associated with their involvement are. Researchers in this project also look at whether contract farming could receive public support from consumers.