Among the array of agribusiness activities, the one which entails the most direct and most complex relationships between large corporations and small farmers is contract farming (CF). In this system, a firm replaces or supplements company production of agricultural commodities with purchases from local farmers through contracts. The contracts specify several conditions of sale and obligate the firm to provide technical assistance, agro-chemicals and other services. The system is well established in developed countries, where it accounts for about 15% of agricultural output (Mighell, 1972): its use in developing countries is significant and increasing. The system is used by both domestic firms and transnational corporations. This book attempts a comprehensive assessment of this particular form of agribusiness, examining its social impact in developed and developing countries. It draws on case studies from Canada, Latin America and Africa. It covers private schemes and public-private joint ventures, domestic and transnational firms and traditional and non-traditional commodities. Each case study focuses on the economic logic of the agribusiness-grower relationship, its social impact on the rural community and the ways in which farmers have responded. The studies demonstrate the diversity of experience associated with contract farming schemes, in the forms they take, the effects they have on local communities, and their long-term viability. The studies cover frozen vegetables in Guatemala, asparagus in Peru, McCain Foods in Canada, Mumias and KTDA in Kenya, and a collection of commodity sketches. The aim is to identify those elements which have produced viable schemes beneficial to local communities and to provide policy advice for firms, farmers' organizations, and governments.
