Contract Farming on Farmers’ Income: Empirical Evidence from Smallholder Farmers in Magude District, Southern Mozambique

  • Carlos Uanicela Vilanculo Eduardo Mondlane University- Faculdade de Letras e Ciências Sociais, Maputo, Mozambique.
  • Tomás Adriano Sitoe Mozambique Agricultural Research Institute, Socioeconomic Studies Centre
Keywords: Income, Agriculture, Contract farming, Smallholder farmers

Abstract

The ability of farmers to integrate into markets is a key factor in increasing, income, food security and well-being of the farmers. One of the ways of integrating smallholder farmers into agricultural markets is the contract farming which, since the beginning of the second half of the 20th century, has been experiencing significant expansion worldwide. Despite the significant expansion of contract farming, the socio-economic impacts of contract farming are not sufficiently studied in Mozambique. This study aims to understand the effect of contract farming on incomes of farmers. It used open-ended questions, and individual discussions with 100 farmers (50 with contracts with Xinavane mill, and 50 without contracts) randomly selected by the convenience and purposive sampling method and structured questionnaires in 5 farmers’ associations in Magude district, southern Mozambique to collect household data and information. Collected data was analyzed using the STATA computer package, and t-tests were performed to compare income of contracted farmers with income of non-contracted farmers. Results indicate an increase of around 36 % in farmers’ incomes between 2015 and 2106 crop seasons, and significant differences on farmer’s income of farmers enrolled with contract farming compared to the farmers without contract farming. This suggests that vertical integration through contract farming is key for increasing income. To boost the effect of contract farming on farmers’ well-being, emphasis must be placed on overcoming technological and institutional deficiencies. The adequate implementation of these policy recommendations poses a significant challenge for the agricultural sector in Mozambique.

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Published
2025-01-22
How to Cite
Vilanculo, C. U., & Sitoe, T. A. (2025). Contract Farming on Farmers’ Income: Empirical Evidence from Smallholder Farmers in Magude District, Southern Mozambique. Mozambican Journal of Applied Sciences, 1(1). Retrieved from https://mjas.ispg.ac.mz/index.php/revistaispg/article/view/63