Several validation workshops were held under FAO's Technical Cooperation Programme (TCP) project "Building Capacities and Facilitating Enabling Environment for Contract Farming in Lesotho (TCP/LES/3801)," implemented at the request of the Government of Lesotho. The project aims to increase knowledge and build capacities of relevant stakeholders in public and private sectors and facilitate an enabling environment for contract farming (CF) for sustainable commercialization and development of agri-food value chains (VCs) in Lesotho. The project has been jointly implemented by FAO and the Department of Marketing in the Ministry of Agriculture, Food Security and Nutrition (DoM of MoAFSN). The core project team from FAO consists of members from FAO Lesotho (FAOLS), Agri-food Economics Division (ESA), Development Law Service (LEGN), and FAO Subregional Office for Southern Africa (FAOSFS).

FAO and MoAFSN organized a series of capacity-building and validation workshops during April and May 2021. The workshops' goal was to build relevant stakeholders' capacity for contract farming in Lesotho and to seek their feedback and suggestions on various outputs on the agribusiness and legal aspects of CF in Lesotho. The first workshop took place in two half-day sessions in a hybrid format with both virtual and physical presence on the 11th and 12th of April 2021. Subsequently, three in-person workshops were held for various relevant stakeholders in central, northern, and southern Lesotho. The participants included staff from MoAFSN and other relevant ministries and agencies, especially those from marketing and extension services, representatives of producers and producer organizations, companies and medium and small enterprises (MSEs) such as packers, processors and traders, institutional buyers, development partners, and service providers.

Each workshop consisted of three main components:

1. A training session sensitizes stakeholders with basic CF concepts and helps them understand the subsequent presentations better and better contribute to the discussion. As training workshops were organized at the start of the project, this served as a refresher course for those who attended the training before or a short course for those who were new to the subject.
2. FAO's legal team presented the draft Contract Farming Bill, which proposes the creation of a voluntary system of contract registration to support the nascent CF practices in Lesotho. The team walked the participants through the draft bill clause by clause, inviting them to comment and validate the text.
3. FAO's agribusiness team presented the findings and recommendations from the value chain analysis and the assessment of CF opportunities and feasibility for four value chains. The team proposed a CF pilot for dry beans based on the assessment.

The agribusiness team presented an overview, the methodology, process of the CF value chain analysis and feasibility assessment, the key findings and recommendations for four value chains in Lesotho, and a proposal to pilot CF for dry beans. The team first conducted a scooping assessment of seven commodities/value chains based on desk research and short consultations with selected stakeholders in 2021. As a result, four value chains—dry beans, potatoes, broiler chicken, and pig—were selected for in-depth value chain analysis and feasibility assessment for CF. The research includes qualitative and quantitative analyses based on the review of the literature and relevant documents, data collected, and, most importantly, a series of stakeholder consultations. Twelve targeted, semi-structured interviews with key stakeholders in the four value chains were conducted from December 2021 to March 2022 with the great support and participation of MoAFSN and MAFS. Information, insights, and suggestions from the consultations were integrated into the analysis and helped the development of the recommendations. A participatory approach and close engagement with stakeholders and ministerial staff and their participation have been essential to all project activities. 

The analysis consists of two components: the value chain analysis is based on FAO's Sustainable Food Value Chain (SFVC) methodology adapted to CF and based on which a feasibility assessment for CF is designed with a matrix of factors used to evaluate opportunities, capacities, and feasibility for CF. As such, findings and recommendations are presented for each one of the four value chains, including:

• Value chain analysis for CF: market outlook, value chain mapping, analyses of core and extended value chain stakeholders (e.g., producers, packers, processors, traders, wholesalers, retailers, main support services), and key findings and recommendations.
• Feasibility assessment for CF: potential opportunities and enabling environment for CF; for the buyers and farmers, potential advantages and incentives, capacities, disincentives, concerns and risks for CF; and key findings and recommendations.

The overall findings are: The main producers in the four value chains are small- and medium-scale farmers, most of whom are not well organized. Lacking access to productive resources and support services, farmers face a multitude of challenges to increase productivity and quality and are, in general, not competitive compared to imports. Buyers have trouble aggregating quality commodities in volume from local producers. The post-farmgate value chain, especially the processing sector in these value chains, is to be further strengthened.

The overall recommendations are: Successful contract farming and sustainable development of value chains require enabling environments, multi-stakeholder collaboration, clear communication, and close engagement. Continuing to raise awareness, build capacities, and develop connections and trust is important, especially when understanding contract farming and its suitability and feasibility, and the capacities to implement contract farming are lacking. Learning from existing contract farming practices in Lesotho and international experiences is also beneficial.

In addition, there are specific findings and recommendations for each VC: For dry beans, piloting contract farming is recommended for some packers and producers with established supply relations, relevant capacities, and sufficient incentives. For potatoes, there is potential to develop contract farming, while capacity development, the establishment of supply relations, and improved public support are still needed. There is already an existing contract farming scheme for broiler chicken that can be strengthened and expanded. For broiler chicken and pork, obtaining accreditation for domestic abattoirs and slaughterhouses is crucial.

Participants had a chance to openly discuss the presentations, provide valuable feedback, and validate the findings and recommendations. Next, a CF pilot will be planned and facilitated in Lesotho. In collaboration with MoAFSN, FAO team will continue the course to promote linkages, build capacity, and support the pilot CF in terms of its design, facilitating dialogs and negotiations, developing a model agreement, and providing recommendations for the pilot and its upscaling.

The Centre for Coordination of Agricultural Research and Development for Southern Africa reported about the contract farming validation workshops (link).

The workshop agenda and presentations in PDF files can be found below. An FAO publication will be released in 2023 based on the value chain analysis and feasibility assessment for CF, as well as a design and recommendations for initiating, managing, sustaining, and upscaling a pilot CF developed under the project. A piece of news will be published for the release of the publication.

Click here to see the workshop agenda, and here to see the presentation. 

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