This paper intends to contribute to the on-going debate about whether and how restructured
agri-food markets can provide viable market opportunities for small-scale farmers in South
Africa. It aims at analyzing contract farming from the small-scale farmer perspective and at
better understanding the implications for small-scale farmers regarding contractual
arrangements with processing and/or marketing firms. The paper, based on empirical
research conducted in the Limpopo Province of South Africa and on a combination of
qualitative and econometric analyses, argues however that contract farming is not a panacea
for small-scale farmers. On one hand, contract farming improves agricultural production for
contract farmers benefiting from increased incomes, enables better access to services and
resources and creates new opportunities to participate in markets. However, on the other
hand, the results, show that contract farming remains limited and mostly involves the already
better-off, who have benefited from specific development paths and public support. This case
study shows that contract farming by itself does not appear to provide an efficient means of
reducing poverty, nor does it provide an institutional tool through which to improve rural
livelihoods. It does therefore, not represent a tool for the majority of small farmers and for
redressing the historical imbalances in the South African agricultural sector.