Contract Farming Resource Centre

Smallholder Farmers’ Dissatisfaction with Contract Schemes in spite of Economic Benefits: Issues of Mistrust and Lack of Transparency

Organization University of Goettingen
Year 2020

[Ruml, A., & Qaim, M. (2021). Smallholder farmers’ dissatisfaction with contract schemes in spite of economic benefits: Issues of mistrust and lack of transparency. The Journal of Development Studies, 57(7), 1106-1119.]

In this article, data collected from smallholder farmers’ participation in contract farming programs in Ghana demonstrates that resource-providing contracts including terms of higher yields and profits provide the most benefit for their livelihoods. However, many farmers regretted their participation even in such farming engagements due to insufficient information sharing by contract companies. This lack of transparency is proposed as the main cause of high dropout rates in such programs as it was seen to lead to deficient understanding of contract conditions in turn sowing mistrust.