This report takes stock of the existing literature and current activities concerning contract farming in selected value chains in Kenya. The objective is to better understand the development potential of contract farming arrangements and which role they can play in the promotion of agricultural value chains.
Chapter 1 presents the background to the study, its research design and hypotheses.
Chapter 2 provides the theoretical background to contract farming and describes different models and types of arrangements.Chapter 3 presents the results of empirical field work, which consisted of 29 interviews carried out with farmers, producer groups, exporters and processors along five value chains (French beans, mangoes, passion fruits, potatoes and poultry).Chapter 4 analyses the field finding. It shows that a number of factors influence the performance of contract farming arrangements and analyses success factors and common reasons for failure.Chapter 5 concludes that in future, contract farming in Kenya is likely to become more important and will be applied in more value chains, since international marketing channels remain of big importance and domestic food production as well tends to serve higher value market segments, i.e. supermarket chains and (fast food) restaurants.
