Contract Farming Resource Centre

The role of trust in contract enforcement: an analysis of smallholder farmers and sugar millers in Swaziland

Organization Department of Agricultural Economics and Management, University of Swaziland, Kwaluseni, Swaziland
Year 2009

This chapter investigates the role of trust in a contractual relationship in agricultural commodity markets. The case study was conducted in the sugar supply chain in Swaziland and conceptualizes the supply chain as a series of connected activities concerned with planning, coordinating, and controlling the production of sugar, starting with the production of sugarcane by farmers, through its processing by millers, and finally its sale to consumers. A survey was conducted in 2001 on 124 smallholder cane growers and representatives of farmers' associations who supply cane to the three sugar mills in Swaziland (Simunye, Ubombo, and Mhlume). Trust was measured using proxy variables in a structured four-point Likert-type scale questionnaire. In conclusion, the study shows that trust is important in enhancing the performance of members of a supply chain and hence that of the whole supply chain.