Abstract
This study has been carried out in the commune of Kétou
in the department of Plateau. It is located between latitudes 7 ° 10' and
7 ° 41'17 " North and longitudes 2 ° 24'24" and 2 ° 47'40 "East.
Household surveys and interviews with resource persons have been conducted in
the villages of Adakplamè and Ewè in August and September
2009.
In developing countries, small farmers are often excluded from
participation to the market. They are marginalized because traders or
agro-processors often choose to cooperate with large farmers in order to reduce
costs and raise profits (Eaton and Shepherd, 2002). Therefore, small farmers in
developing countries are not able to reduce constraints such as those related
to access to credit and to markets. In the commune of Kétou, contractual
arrangements between traders and producers enable farmers to obtain credit to
perform their activities. At harvest, farmers sell back the surplus of their
food crop to the traders from which the credit has been received. Such
arrangements are called contract farming.
The objective of this research is to present the
characteristics of contract farming in the study area and to determine its
effects on the performance of food production. To achieve this objective, we
combine quantitative and qualitative methods. The data analysis has been done
with Excel and SPSS 16.0.
The results of the study show that contract farming follows
the informal model in the commune of Kétou. It is applied exclusively
for maize. The contract is verbal and does not involve a third party to
contribute to enforcement. The actors involved in contract farming in the
commune of Kétou are individual maize traders and individual maize
producers. The traders are small wholesalers of maïze, usually women,
living in the city of Kétou (the headquater of the commune) and mostly
operating on the market of the city of Kétou. The maize producers who
operate under contract are large-scale producers and relatively young
farmers.
Few items are specified in the contract. These include a
credit granted by the trader at the onset of the crop season, the commitment by
the producer to sell his surplus of maize to the trader and the repayment of
the credit by the producer. The data show that in the commune of Kétou,
enforcement problems are limited. For the year 2008 - 2009, the contractual
terms were respected by both parties.
The credit earned under contract is largely used to finance
agricultural production (76 percent of the credit). The rest is for basic goods
and services (food, health, funerals, education). The share invested in
agriculture is mainly intended to hire labour. The amount of credit received by
farmers under contract is CFAF 66 400 and 71 320, on average, in 2008 and
2009, respectively. It can be inferred that contract farming is expanding in
the study area.
Contract farmers receive different producer prices. It has
been found that there are several modes of determination of the producer prices
used in the contract. The first mode is ex ante pricing: at the onset
of the crop season, at the time when the credit is granted to the farmer, a
producer price is already adopted and does not change at harvest. This mode
applies to 30% of the survey contract farmers. The second mode is ex
post pricing. There are two variants, however. In ex post
pricing, variant 1, the producer price is determined at the time when the
produce is collected by the trader and both parties agree to adopt the price
prevailing in the market. In ex post pricing, variant 2, the market
price for the time of collection is adopted, but the parties accept to apply to
this price a small reduction. In 2008, ex post pricing (variant 1) and
ex post pricing (variant 2) were adopted by 23.33% and 46.67 of
contract farmers, respectively. The data indicate that the mode of price
determination chosen in a contract may be related to the age of the farmer, the
sex of the trader, the number of year of experience with the contract for the
farmer. It may also depend on whether the farmer is a parent of the trader.
An empirical study has been carried out to explain the
mechanism of the impact of contract farming on the farm performance in the
study area. This has been based on regression analysis. The results show that
the productivity of the main fixed factor of production in the area (family
labour) is significantly higher when contract farming is adopted. This effect
is obtained through the following channels. The credit obtained by the contract
farmer is used to hire wage labour and the results confirm that they are used
to expand significantly the area of maize. As a result, production expanded and
the productivity of the family labour expanded with it. The contract farming
does not seem to induce a significant improvement in the yield of maize. This
result may be coherent given that the credit earned under contract in the study
area is not used to purchase inputs like mineral fertilizers or improved
varieties of maize. It has been found that the contract has a positive effect
on the yield of maize but it is not significant.
Some suggestions in connection with rural development policies
can be made on the basis of the results obtained in this research. We suggest
to take into account endogenous contractual arrangements in public
interventions. In the commune of Kétou, market oriented-agriculture is
expanding especially for maize. This situation is the result of the
collaboration between traders and farmers through the establishment of
agricultural contracts which allow farmers to obtain credit from traders. We
suggest to promote this collaboration initiated endogenously. It is also
useful to integrate maize traders in rural and agricultural development
programs in the commune of Kétou. Their inclusion may help producers to
have easy access to credit.
For future research, we suggest to apply a more elaborated
methodology to study the choice of the mode of determination of producer prices
in contract farming in the study area.
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