contract farming in africa by sotonye anga 2000.ppt [rea
DESCRIPTION
The beauty of contract farming lies in the fact that it encourages demand-driven farm production. African farmers need guaranteed markets for their farm produce.TRANSCRIPT
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CONTRACT FARMING IN AFRICA: critical elements and success factors May 2000
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BYSOTONYE ANGAAGRIBUSINESS EXPERT AND STRATEGISTEMAIL: [email protected]
05/13/2000sotonye anga
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PREFERRED FARM BUSINESS MODEL
• Let us approach contract farming as the preferred and alternative farm business model that delivers solid linkage between FARM AND
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that delivers solid linkage between FARM AND MARKET.
• It is a ‘win win’ for parties to the contract.• Encourages specialization.• Viable for both parties when structured
properly.• A platform for team work.
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THE PLACE OF FARMING IN AFRICA
• Farming is a means of livelihood for over a hundred million people in Africa.
• Over 80% of African farmers just farm or grow
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• Over 80% of African farmers just farm or grow crops without guaranteed market.
• Whenever there is an upset in the commodity market there means of livelihood becomes threatened.
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WHAT IS CONTRACT FARMING
• Contract farming is an agribusiness system that is focussed on the production and marketing of agricultural commodities based on forward
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agricultural commodities based on forward contracts between farmers(producers) and Buyer.
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ESSENCE OF CONTRACT FARMING
• Contract farming is meant to promote firm commitment between parties to the contract (farmers and buyers).
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(farmers and buyers).• That the farmer will grow or produce
agricultural commodity of a specific type, quality, quantity, price and at a time such as is required by the buyer.
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CONTRACT FARMING AND PRE-ARRANGEMENTSIn contract farming to a great extent every aspect
of the business is PRE-AGREED.PRE-AGREED PRICE.
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PRE-AGREED PRICE.PRE-AGREED QUALITY.PRE-AGREED QUANTITY (as in what makes
for minimum or maximum).PRE-AGREED TIME.
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DEFINING ROLES (FARMER)
• Provides land ( not in all cases).• manpower (farm hands).• Knowledge and expertise in farming.
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• Knowledge and expertise in farming.• Security for farm.• Follows good agricultural practice (GAP).
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DEFINING ROLES (BUYER)
Successful farming requires high quality input.• Provides Seed.• Provides Agro chemicals.
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• Provides Agro chemicals.• Provides Technical assistance/advice(through
experts).• Financial support/soft loans(optional but can be
arranged through banks).• Buys the commodity at harvest.
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BENEFITS OF CONTRACT FARMING (FARMER)• Guaranteed a fixed income as agreed.• Farmer can concentrate on his area of core
competence.
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competence.• Farmer need not bother about
marketing(commodity sold in advance).• Enjoys safeguard from price fluctuations.• Can plan and make profit.
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BENEFITS OF CONTRACT FARMING (BUYER)• Timely supply of raw materials.• Control over seed origin.• Uniformity of commodity.
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• Uniformity of commodity.• Can effectively plan operations and logistics.• Can plan and make profit.
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CONTRACT FARMING OPPORTUNITIES
IT CAN WORK FOR: • ROOT CROPS: ginger, cassava, potato, turmeric,
yam etc.
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yam etc.• GRAINS: sorghum, maize, rice, beans etc.• FRUITS & VEGETABLES: tomato, peppe, onion,
garlic, banana, sugarcane etc.• TREE CROPS: cashew, cocoa, shea, rubber, oil
palm. Etc.• The list goes on and on.
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THE BEAUTY OF CONTRACT FARMING
• Lies in the fact that it encourages demand-driven farm production.
• African farmers need guaranteed markets for
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• African farmers need guaranteed markets for there farm produce.
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THANK YOU FOR LISTENING!!!05/13/2000
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