Determinants of smallholder tobacco contract farming participation in Zimbabwe

Abstract

Determinants of smallholder tobacco contract farming participation were considered in this study. The study was motivated by the shift in Zimbabwe’s tobacco production base that used to be almost entirely large-scale commercial before the Fast Track Land Reform Programme to almost 50% now being produced by smallholder farmers. In the study, a self-administered questionnaire was used to collect data from 36 tobacco producing districts for the 2012/2013 tobacco season. Primary data was collected through visits to four of the main tobacco provinces namely Mashonaland East, Mashonaland Central, Mashonaland West and Manicaland.Data for the remaining provinces was then collected from contracted farmers selling their crop at their merchant’s premises in Harare and from non-contracted farmers selling their crop at auction floors namely Boka, FSF and Premier. Stratified random sampling technique was employed to select 140 contracted and 117 non-contract farmers from the two strata. After theoretical and empirical review on literature, data was collected on socio-economic characteristics such as age, education, off-farm income, gender, household size, farm size, experience, credit accessibility, extension services, ecological region, and distance from main road as well as asset specificity. The logistic regression model was then employed to determine the variables that influence smallholder tobacco farmers’ decision. The results indicated that among the included variables only age, household size, distance from main road, experience, access to credit, extension services and asset specificity significantly influence contract farming participation by smallholder farmers. From the results, the negative relationship between contract farming participation and access to credit, experience and distance from the main road could suggested that most smallholder farmers participate in contract farming because they lack alternatives. The policies in the study are then drawn bearing in mind that smallholder farmer may participate in contract farming only because they lack alternatives and the specific nature of tobacco producing assets. Also the study recommends for tailor-made policies that consider, for instance, geographical and ecological region differences. It is also suggested that provision of farmers with alternative sources of finance and information, help reduce farmer exploitation by large agri-business firms and possibly increase returns to farmers, thus, in turn help reduce poverty levels.