7/9/2010
Nazia Habib-Mintz
University of Cambridge, UK
Nazia.research@gmail.com
Ensuring commercial viability and sustainability of contract
farming in Tanzania: Cashew and Jatropha contract farming
schemes
Synopsis
This article will focus on two different Tanzanian contract farming (CF) schemes in the cash crop sector
which links small farmers to the global commodity chain of food and biofuels. Two commodities Cashew
and Jatropha have been introduced to the country by the forces of globalization, privatization and
decentralization of the agricultural sector. While cashew sector follows a traditional CF scheme,
jatropha a recent cash crop is widely produced under a ‘modern form’ of CF. The study will give a
considerable attention to how formal and informal institutions influence the design, roles and benefits
of contract farming schemes in helping link small poor farmers to global markets. A comparative
analysis will draw lessons from both versions of CF schemes and highlight how CF arrangements can be
set up and managed to result in greater benefits and fewer risks for the smaller scale farmers as they are
exposed to the global market dynamisms. This research will draw fieldwork experience from Tanzania
conducted in 2008.
Paper outline:
Introduction (2 pages):
Briefly introduces Tanzanian agricultural sector, institutional capacity and the main drivers of national
agricultural sector development. Then, lays out the context of Tanzanian contract farming scheme and
its importance to the national strategy to modernize the agricultural sector and address poverty
reduction among small farmers. Next, identifies the underlying theoretical frameworks which are used
here to develop the fieldwork based case study analysis i.e. global value chain and institutional
feasibility study.
Context and status of contract farming in Tanzania (4 pages)
Introduce cashew and jatropha crops within the CF context, which will be developed in the following
sections.
 What is the context of CF scheme development in Tanzania?
 What are the characteristics of the patterns of contract procurements that have emerged linking
small farmers with modern sector buyers, directly and indirectly?
 What are the flow of services, and reciprocal obligations, particularly in respect of the global
value chain governance and transfer of transaction costs that have helped small farmers to meet
the procurement requirements and sustain in the global market channel?
Institutional assessment: Tanzanian Cashew and Jatropha CF experience (4
pages)
This section discusses the effectiveness of the contractual and institutional arrangements between
cashew and jatropha cropping in helping small farmers to access modern market channels. This section
will also highlight specific aspects of contracts and internal factors (e.g.land) that influence the farmers’
7/9/2010
Nazia Habib-Mintz
University of Cambridge, UK
Nazia.research@gmail.com
decision making process on what to produce and which scheme to participate. Also, sustainability of the
private contractual agreement committing in local agricultural system development is addressed here.
 How do the national and sub national regulatory and informal institutional frameworks
influence the quality and sustainability of CF schemes in two different commodities (e.g.
extension services, land rights)?
 How do the terms of contract influence farmers’ decision to participate in CF scheme for cashew
and jatropha production and ensure participation (e.g. food vs fuel competition)?
 What increase or reduce prospects of private sectors for sustaining the procurement contracts
with the small farmers?
Global value governance: Cashew and Jatropha CF experience (4 pages)
The global commodity value chain transmits price and procurement requirements to the small
producers at the bottom of the chain, who are tied by CF scheme. This section highlights the role and
differences of CF schemes in cascading down effects of external factors both in cashew and biofuels
sector small farmers. This sector considers the welfare of contracted smallholders exposed to
variability of global primary commodity market.
 What are the external factors and how do they cascade down through the global value chain
and influence contract farmers’ agricultural exercise and contractual payouts?
 What are the costs to the contractors in the global value chain from the global market variability
in price and procurements?
 How do CF schemes affect the likelihoods of small farmers by establishing and sustaining
procurement contracts?
1. Conclusion (1 page)
This section summarizes the findings, and highlights lessons from both commodities. It also briefly
touches on how different kinds of CF arrangements can be set up and managed by the national and
global actors involved to result in greater benefits and fewer risks for the smaller scale farmers.
 What can be learned from the challenges and opportunities of cashew and jatropha CF
experience?
 What are the considerations for the future of commercial viability and sustainability of contract
farming in Tanzania which will protect the rights and welfare of small contract farmers?
Bibliography
Primary interviews
Government documents
International development agency published documents
Academic journals
Books