What you need to understand about contract farming
Contract farming is one of the few options available that can guarantee a ready market for your farm
Farming without being assured of market, is gambling. Contract farming is one of the few options available that can guarantee a ready market for your farm
produce. However, contract farming has its perks and we need to be fully aware of what we as farmers are signing up for.
I will begin the first twin of my article on contract farming with a personal experience. I was in my forth year of campus, tired of all the non-practical hours spent on archaic literature that characterized my agriculture coursework. Aware of the imminent danger of being irrelevant in the corporate world, I ventured into the world of contract farming. As an average youth, I had no land nor resources to purchase an eighth of an acre. With a group of four other unemployed youths, we enrolled in a grant program that helped us I gaining technical know-how, lease a section of the program’s land, bought all the infrastructure, inputs and offered us, financial consultants and agronomists. Furthermore, they were kind enough to further engage directly in produce collection and delivery to the markets. Our first harvest was quite bountiful. Our labor was not in vain. However, mismanagement by our sponsor company resulted in abstinence in their supply of pesticides and herbicides, incompetent agronomists, insufficient water supply with us being forced to purchase agrochemicals and even spend the wee hours of the nighty harvesting and weighing our second and third harvests. It was only after the third harvest that we received a bank cheque of Ksh. 7,000 to be distributed among four hungry overworked youths. We were just but victims of circumstances of yet another youth initiative sham. I am an inactive member officially and quite grateful for the knowledge and hands-on experience as a farmer. I can now fiercely fight against farmer exploitation, from experience.
Some companies contracting farmers and offering fair prices include:
- Bidco Oil Refineries
By offering market to at least 10,000 farmers in Eastern, Rift Valley Central and Western regions; Bidco gets oil seeds from 10,000 growers of Soya bean and sunflower seeds. The company is looking into contracting smallholder farmers.
- East African Breweries Limited
Sorghum production in Kenya has declined over the years creating a niche for the scarce sorghum farmers especially in Nakuru and its environs. East African Breweries Limited sorghum project pay farmers at least Shillings 30 per kilo. The farmers able to take their harvests to the company storage facility in Nakuru get an extra five shilling per kilo.
The firm is using its subsidiary East Arica Maltings Limited (EAML) to source and contract farmers to grow the much-needed crop.
- Jade Fresh Limited
Are you in Eastern or Central Kenya and interested in growing vegetables and fruits for profits? Apart from offering farmers quality seeds, fertilizer and agronomists to guide them throughout the production process. Jade Fresh Limited is your go-to outsourcing company offering to buy your produce at better prices. Send your request to email@example.com or call 0713370614.
- Fair Trade Enterprise
By contracting farmers across the country to grow French beans Snow peas, Sugar snaps and Garden Peas, the Fair Trade Enterprise offer income flow to farmer groups in regions. The reason behind working in farmer groups is so as to meet the production targets set by the firm.
The firm currently provides access to inputs, technologies, credit and other services to approximately 500 households in the program. Farmers are organized in six farming groups for easy management of farming and bulking purposes.
In my experience, if the contractual agreement disempowers you from accessing the markets, disempowers you from diversifying your produce revenue streams through value addition and denies access to audit reports and other relevant documentation; you are on the losing end. It is crucial to do a background check before committing; lest lie in bed with the enemy. Contract farming is neither community service nor a hobby. It essentially is a remunerative business venture.
Very helpful. Hope to have more of this intel
I have a land and want to put it in to agri business , located in kajiado (ongata rongai). I am financialy unstable after covid pandemic, but I would like to assisted in farming and marketing.