The value components of contract farming in contemporary capitalism

Contract farming (CF) has generally been understood as, essentially, a market institution—by both (approving) “mainstream” and (critical) “radical” perspectives. Analyses of relations of production have, meanwhile, tended towards a problematic “peasantist” frame, where contracts undermine farmer “autonomy” in processes of “flexible” corporate agro‐industrial restructuring. This paper argues that a materialist analysis of CF from within capital–labour relations offers a stronger conceptual foundation for re‐synthesizing questions of market‐power. It first argues that radical notions of “peasant subsumation” conceptually mirror Marx's “formal subsumption of capital” but underplay dynamics of “real subsumption” accompanying capitalism's wider development. Drawing on the “petty commodity production” concept, it then argues that CF's “flexibility” rests in its differential content. CF's fungibility to contradictory movements of “integration” and “dispersion” enables it to emphasize different methods of surplus appropriation under shifting conditions; each corresponding to a different dominant social tendency. On the one hand, conditions of market expansion inspire integration for relative surplus appropriation through raised productivity, and CF tends to act as a “tool of proletarianization” in the wider centralization of capital. On the other, conditions of contraction motivate the dispersal of unvalorized capital, prompting efforts to raise absolute surplus appropriation, and CF tends to act as a “tool of differentiation” to concentrate agricultural capital.     

Private and state-led contract farming in Zimbabwe: Accumulation,social differentiation and rural politics

Contract farming schemes often amplify existing patterns of socio-economic differentiation. In Zimbabwe, processes of differentiation were underway before the current expansion of contract farming and they have deepened through the Fast Track Land Reform process. This article examines how pre-existing dynamics of differentiation shape the forms of contract farming adopted, as well as which groups of farmers gain access and on what terms. Social differentiation partly explains the outcomes of contract farming, even if contract farming in turn results in further differentiation. This article contrasts private sector-led contract farming of tobacco and state-led financing of maize production (the ‘command agriculture’ programme) in two high-potential sites and across different forms of land use. Unlike in many other settings, contract farming in Zimbabwe is highly influenced by the state, through the regulation of private sector arrangements and the establishment of a state-led contracting programme. The state-led programme boosted maize production amongst medium-scale farmers and resulted in an embedding of patronage relations. Meanwhile, the private-led contract farming has supported a widespread boom of tobacco production, mainly amongst smallholders. We find therefore that contract farming is highly dependent on the contingent, politically mediated processes of social differentiation.     

Tobacco,contract farming,and agrarian change in Zimbabwe

The growth of smallholder tobacco production since 2000 has been one of the big stories of Zimbabwe's post–land reform experience. Yet the implications for agrarian change, and the consequences for new relations between farmers, the state, and agribusiness capital have rarely been discussed. The paper reports on work carried out in the Mvurwi area of Mazowe district in Zimbabwe with a sample of 220 A1 (smallholder) farmers and 100 former farmworkers resident in compounds on the same farms. By going beyond a focus on operational and business dimensions of contract farming, the paper concludes with reflections on the implications for understanding agrarian relations and social differentiation in those areas of Zimbabwe where tobacco growing is now significant, with lessons more broadly on the political economy of contract farming, and the integration of agribusiness capital following land reform.     

Land and contract farming: Changes in the distribution and meanings of land in Kilombero,Tanzania

In the context of contract farming of sugarcane in an outgrower scheme in Tanzania, this paper explores how the scheme has fundamentally altered people's relationships with the land over the last 50 years, in particular, since 1999, when, after three decades, the sugar parastatal was privatized. The paper reviews the literature on the mutual relationship between contract farming and land ownership and examines the scheme with a focus on long-term changes in the forms of land acquisitions and land use. We argue that the meaning and importance of landownership in contract farming schemes needs to be reassessed if participation in contract farming entails a departure from previous forms of acquiring land, generates new spatial patterns of agricultural production, and necessitates additional economic and social resources in order to transform land into an economic asset.     

Risk pooling cooperative games in contract farming

Contract farming can be an effective measure to deal with agricultural production risks. This study provides a two‐stage stochastic programming model to analyze farmers’ cooperation in the context of contract farming under uncertainty. It provides a fair cost allocation policy for a coalition of farmers using a stochastic linear duality approach. A fair cost allocation implies that no subset of farmers has an incentive to leave the coalition. Thus, a fair allocation policy ensures the stability of a coalition. Meanwhile, the risk pooling game is shown to have population monotonicity, which means that, every time a coalition adds a new member, each farmer within the coalition will incur a smaller cost. Hence, the population monotonicity gives an incentive for coalition expansion. Our results not only provide a simple way to design fair cost allocation policies for collaboration strategies in contract farming, but also play an important role in the sustainable development of farmers’ coalitions.     

Producing industrial pigs in southwestern China: The rise of contract farming as a coevolutionary process

The literature on contract farming (CF) has to date focused on how outside capital uses CF to vertically integrate non-capitalist producers into agro-industrial value chains. We argue that in places where multiple dynamics of capitalist growth co-exist, CF relationships can also emerge between different types of capitalist producers that are already in capitalist production using other organizational forms. In this situation, the well-studied drivers that fuel the spread of CF become less consequential; the emergence of CF is instead more contingent on the complex interactions between producers and the specific conditions and events in the local environment. We conceptualize the emergence of this type of CF as a coevolutionary process and develop an analytical toolkit from this perspective to study the rise of CF in industrial pig farming in a Chinese county. Our analysis traces the evolution of agro-industrialization over a decade (2006–2016) and shows the emergence of CF as a coevolutionary outcome shaped by the unique biography of the contract producers, the “historical accident” of a market downturn, and the reciprocal responses between contract producers and agribusinesses.     

Formal and informal contract farming in Mozambique: Socially embedded relations of agricultural intensification

This paper explores the role of contract farming arrangements in agricultural intensification in sub-Saharan Africa, combining secondary literature and original case material from Mozambique. The paper extends the scope of “contract farming” beyond the formal contracts between large companies and small-scale producers to include less formal credit agreements between farmers and traders. It argues that such informal contract arrangements are evidence of farmers' agency in “real markets.” In the studied cases, farmers use contract farming opportunities to intensify agricultural production by investing in irrigation and inputs. While informal contracts typically concern locally consumed crops, thus with more possibilities for side selling than formal contracts for export crops with company-controlled markets, informal contract compliance reflects closely knit social ties between the contracting parties. In both formal and informal contracts, purchasers tend to seek out producers who are already irrigating, thus obtaining gains from farmers' earlier investments. This also implies contract farming as a mechanism for accelerating social differentiation arising from unequal access to irrigation. The paper argues that the significance of informal contracts in the studied cases raises the possibility that informal contract farming by local traders plays a more important role in agrarian transformation in Africa than formal contract farming by large companies.     

Contract farming,contract design and smallholder livelihoods*

Contract farming has gained in importance in many developing countries. Previous studies analysed effects of contracts on smallholder farmers’ welfare, yet mostly without considering that different types of contractual relationships exist. Here, we examine associations between contract farming and farm household income in the oil palm sector of Ghana, explicitly differentiating between two types of contracts, namely simple marketing contracts and more comprehensive resource-providing contracts. Moreover, we look at different income sources to better understand how both contracts are linked to farmers’ livelihood strategies. We use cross-sectional survey data and regression models. Issues of endogeneity are addressed through measuring farmers' willingness-to-participate in contracts and using this indicator as an additional covariate. Farmers with both types of contracts have significantly higher household incomes than farmers without a contract, yet with notable differences in terms of the income sources. Farmers with a marketing contract allocate more household labour to off-farm activities and thus have higher off-farm income. In contrast, farmers with a resource-providing contract have larger oil palm plantations and thus higher farm incomes. The findings suggest that the two contract types are associated with different livelihood strategies and that disaggregated analysis of different income sources is important to better understand possible underlying mechanisms.     

Contract farming and everyday acts of resistance: Oil palm contract farmers in the Philippines

Contract violations are critical issues determining the success and sustainability of contract farming (CF). This paper challenges the common portrayal of the “powerful” company versus the “powerless” landowners/smallholders by using the literature on labour agency in global value chains to understand minor contract violations of contract farmers such, as side-selling, refusal to harvest, and burning/felling of oil palm trees. This paper conceptualizes these violations as acts of minor agency or everyday acts of resistance. The analysis highlights how CF has created chains of dependency, in which smallholders are integrated into the modern market economy through new relations of debt and power. In response, contract farmers attempt to influence and shape the CF relation by using these different acts of minor agency. This paper finds that acts of minor agency, in the aggregate, can have important effects on contract relations, governance, and organizational structure of the chain and has the potential to lead to broader changes in the underlying social relations of contract. It highlights how individual acts of minor agency may contribute to the development of a consciousness of collective opposition to the contract relation.     

Panama disease and contract farming in the Philippines: Towards a political ecology of risk

Despite the vast research on contract farming by agrarian scholars, little is known about interactions between biological risks and the social–political effects of contracts. This study analysed contract farming arrangements in the export banana industry in the Philippines amidst an expanding epidemic of Panama disease. We developed a political ecology of risk approach to investigate how ideas about technological and biological risks are influenced by contractual arrangements, and we borrowed from Cultural Theory the insight that risk and blame are connected concepts, always political, and disadvantage marginalized groups through disproportionate risk burdens. Data collection involved the study of contracts, interviews with decision‐makers, and focus group discussions with agrarian cooperatives. The views of both large corporations as well as organized smallholders were recorded. We found that the former contractually compel the latter to bear the burden of the disease, while blaming them for its spread. Risk decisions were embedded in the dynamics of agrarian social relationships, and economic and political arrangements between actors influenced possibilities and limitations for disease control. We argue that the contractual stipulations, in concert with blaming processes, create a discursive environment that both allow inequitable relations to remain unquestioned, and constrain possibilities for control of Panama disease.     

农民土地抗争的行动逻辑及其治理

研究目的:探索农民土地抗争的行动逻辑和机制,为土地冲突提供治理对策。研究方法:抗争政治方法、描述性研究法。研究结果:(1)区分出不同历史时期农民土地抗争的互动关系。(2)得出农民土地抗争的认知逻辑是统治者和政府认为统治者权力以及公共权力优先于农民权利;动力逻辑是农民认为政府行为违背情、理,其土地权益受损;政治逻辑是农民认为出现了有利于抗争的政治机会。(3)发现土地抗争中的三个行动机制:土地抗争诉求的具体利益机制;农民土地抗争方式的踩线偶尔越线机制;政府对抗争往往采取压制的机制。研究结论:对现代社会土地抗争提出依法保障农民的抽象土地权益;增强政府制度化吸纳抗争的能力;在互动中通过协商达至"重叠共识";在改革中推动土地制度创新等治理建议。     

New evidence regarding the effects of contract farming on agricultural labor use

Contractual agreements between smallholder farmers and agribusiness companies have gained in importance in many developing countries. While productivity and income effects of contracting in the small farm sector were analyzed in many previous studies, labor market and employment effects are not yet well understood. This is an important research gap, especially against the background of continued population growth and structural transformation. Here, we investigate the effects of two types of contractual agreements between large international processing companies and smallholder farmers on agricultural labor use, household labor allocation, and hired labor demand in Ghana's palm oil sector. We use cross‐sectional survey data and a willingness‐to‐pay approach to control for unobserved heterogeneity between farmers with and without contracts. We find that agricultural labor intensity is substantially reduced through the contracts, because contracting in Ghana is associated with the adoption of labor‐saving procedures and technologies. Simple marketing contracts lead to reallocation of the saved household labor to off‐farm employment, whereas resource‐providing contracts lead to a stronger reallocation of labor within the farming enterprise. Household labor is more affected by labor savings than hired labor.     

Potatoes,Petty Commodity Producers and Livelihoods: Contract farming and agrarian change in Maharashtra,India

This paper explores the implications of contract farming for patterns of agrarian change in India. The paper draws on a detailed analysis of primary qualitative data from a case study of potato contract farming in the state of Maharashtra. It argues that debates on contract farming are often ideological in nature, leading to overly simplified narratives of “win–win” or “win–lose.” Instead, by combining the strengths of agrarian political economy and rural livelihood analysis, the paper offers a concrete exploration of the intersections between contract farming, livelihoods, and agrarian change. It finds that contract farming activities in the case study villages are focused on a group of petty commodity producers. However, rather than sparking dynamic new processes of accumulation among contract farmers or leading to new forms of exploitation, the paper argues that contract farming is contributing to processes of agrarian change “already under way.” These processes are intimately connected to livelihood diversification and the struggles of new classes of fragmented labour.     

Participation in contract farming and farm performance: Insights from cashew farmers in Ghana

The global demand for cashew nuts continues to increase steadily. However, many African countries face difficulties in marketing and adding value to the product. Using recent survey data of 391 cashew farmers in Ghana, this paper contributes to the growing evidence on the significance of contract farming (CF) in improving the welfare of rural households in developing countries. Specifically, the paper analyzes the factors that influence cashew farmers’ decisions to participate in CF, and the impact of participation on farmers’ performance. We employ a recently developed switching regression model with endogenous explanatory variables and endogenous switching to control for selection bias caused by observable and unobservable factors. The empirical results show that participation in CF significantly increases labor productivity and price margins, as well as cashew yields, and net revenues. A disaggregated analysis of the sample into farm size categories reveals that small‐sized cashew farms tend to benefit more through CF, compared to medium‐ and large‐sized farms.     

The afterlife of living under contract,an epilogue

This epilogue summarizes key challenges in the critical study of contract farming (CF) that are highlighted in this special issue, and it utilizes our co-edited volume Living under contract as the platform to ask what has been learned and what questions remain nearly three decades after the book's publication. It discusses the political and historical moment of the late 1980s when our CF project was started and the neo-liberal roots of structural adjustment programmes (SAPs) were firmly implanted, especially in Africa—the regional focus of our book. We argue that this neoliberal turn continues to shape many topics addressed in this special issue, including the role of the state, labour and land (and ecology) relations, and the vertical integration of CF within global values chains. The epilogue concludes with a plea for more systematic comparisons and “big picture” analyses that highlight how space, local agrarian formations and classes, state powers, and materiality (the commodity itself) shape the character and dynamics of CF schemes.     

Impact of contract farming on yield,costs and profitability in low‐value crop: evidence from a low‐income country

Lentils, a low‐value and highly nutritious crop, are Nepal's largest pulse cash crop. However, the majority of the nation's smallholders produce lentils on very small plots of land. The large gap in lentil yields between Nepal and other lentil‐producing countries underscores the importance of improving yields and income of smallholders. When it comes to the financial viability of small farms, particularly in developing countries, and globalisation, contract farming (CF) may prove useful in achieving efficiency and profitability in smallholder lentil farms in Nepal. This study employs the propensity score matching approach to examine the effects of the adoption of CF on yields, profitability and costs of smallholder lentil farms in Nepal. Findings from this study reveal that contrary to popular belief, CF adoption by lentil producers in Nepal has a positive and significant effect on per‐hectare revenues, profits and yield and a negative impact on variable and transportation costs. The study finds that only very smallholder lentil farms (0.01‐0.05 ha) benefit from CF.     

Measuring technical efficiency of Spanish pig farming: Quantile stochastic frontier approach

The pig meat production plays a significant role in the Spanish agrofood system. The assessment of the efficiency performance with which farmers are operating is necessary to define adequate policy and management strategies. In this context, this study aimed to determine the technical efficiency (TE) performance of pig farms and to examine the key factors that may affect the production system in Spain. To do so, the analysis relies on the quantile stochastic frontier model using a sample of Spanish pig farms. Results show a significant difference between production frontier parameters across the selected quantiles, which support the relevance of using the quantile regression approach. The optimal quantile for the stochastic frontier indicates an average TE level of 75%. In addition, empirical findings suggest that pig farmers in Spain give more importance to the adoption of high technology to improve their economic and technical performance as well as their competitiveness at the European pig market.     

Living under value chains: The new distributive contract and arguments about unequal bargaining power

In the 1980s and 1990s, during the high-water mark of Washington Consensus development, rural sociologists and geographers critical of contract farming described contract as a legal fiction—one that imagines formally equal and voluntary relations between large firms and small farmers and hence that functions purposefully to obscure unequal social relations. Today, however, development planners, who argue for contract farming as an integral part of value chain agriculture, describe unequal bargaining power as a problem for rural development to solve. Our article analyzes how proponents have domesticated what was once a radical critique of contract farming—a phenomenon that we suggest tells of value chain development more broadly. Via a qualitative case study of India, we describe how a range of actors—development planners, state officials, and farmers—now all make arguments about unequal bargaining power and yet hold disparate understandings of what bargaining inequalities mean and what reforms should therefore follow. More specifically, we show how and why common reform proposals—for contract regulation and farmer aggregation—remain constrained by the inequalities they would challenge and thus why farmers themselves speak different possibilities to the problem of unequal bargaining power.     

广西农用地结构、特征及合理利用

分析了广西农用土地利用结构；讨论了农用地的4个基本特征：人均耕地面积少，农业后备资源不足；利用不充分，低产面积比重大；利用不合理，生态环境受破坏；资源优势没有得到充分发挥；进行了资源比较优势分析，提出了合理开发利用的基本途径：一是因地制宜调整农用地结构；二是发挥资源优势，大力发展亚热带特色农业；三是努力提高农用地经营效益；四是加强资源利用的生态保护。     

The Rise and Decline of Small‐Scale Sugarcane Production in South Africa: A Historical Perspective

South Africa's sugar industry has long been distinguished by its large number of small‐scale sugarcane growers (SSGs) farming on ‘communal’ land and its peculiar privately administered regulatory structure. In recent years, however, the numbers of small‐scale growers have declined precipitously. This paper argues that the relationship between the rise and fall of SSG production and the industry's governing regulatory structure is closer than usually appreciated. The emergence of SSG production in the late 1970s and the 1980s can be traced to industry‐subsidized initiatives, disguised as small‐scale credit, to bring commercially inalienable Bantustan land into cane production with strong miller oversight. From the late 1980s to 1990s, however, the elimination of these subsidies encouraged millers to subcontract support to farmers, while simultaneously instigating an increase in SSG numbers by removing restrictions on grower registration. Although low rainfall is a central proximal factor in the rapid decline of the SSGs in the 2000s, their rapid increase was structurally fragile.