The Effectiveness of Contract Farming for Raising Income of Smallholder Farmers in Low- and Middle-Income Countries: a Systematic Review

Contract farming is used by an increasing number of firms as a preferred modality to source products from smallholder farmers in low and middle-income countries. Quality requirements of consumers, economies of scale in production or land ownership rights are common incentives for firms to offer contractual arrangements to farmers. Prices and access to key technology, key inputs or support services are the main incentives for farmers to enter into these contracts. There is great heterogeneity in contract farming, with differences in contracts, farmers, products, buyers, and institutional environments. The last decade shows a rapid increase in studies that use quasi-experimental research designs to assess the effects of specific empirical instances of contract farming on smallholders. The objective of this systematic review was to distill generalised inferences from this rapidly growing body of evidence. The review synthesised the studies in order to answer two questions: 1: What is known about the effect size of contract farming on income and food security of smallholder farmers in low- and middle-income countries? 2: Under which enabling or limiting conditions are contract farming arrangements effective for improving income and food security of smallholders

Excise Tax Changes and Their Impact on Gadam Sorghum Demand in Kenya

Gadam sorghum has in the recent past been promoted by various operators through a Public-Private-Partnership. Taking advantage of this, the largest brewing establishment in Kenya developed a beverage targeted for the low-end market in an effort to stem the problems associated with illicit alcoholic beverages while giving farmers a reliable income source. With its promotion, a number of farmers have devoted effort at availing grain to via contract, for the purposes of brewing. However, excise tax changes are destined to impact this arrangement by altering the conditions for different players along this particular chain. Using ARIMA time series modelling, we analyse the imposition of two tax changes—a reduction of tax in 2006 and an increase of tax in 2013—on the demand for the product and therefore demand for Gadam sorghum grain. Data is represented by Results show a relatively large change in demand occasioned by tax increases. The paper argues that the further encouragement of sorghum growing will undoubtedly cushion farmers from climate change impacts while it’s processing can boost manufacturing to meet the targets stated in Vision 2030 while offering farmers a consistent income source