Inclusive business models enable the responsible integration of small-scale producers into markets with the underlying principle that there are mutual benefits for all involved parties. Contract farming is one of the business models that has the potential to sustainably increase investments in agriculture while also safeguarding the livelihoods and incomes of small-scale producers. However, if contract farming is not conducted in a responsible manner, it can pose numerous risks for both small-scale producers and the private sector.  Therefore, in order to ensure that contract farming is responsible and provides mutual benefits for all, it has to be supported by relevant policies, tools, regulatory and legal frameworks.

In this regards, FAO and the International Institute of Sustainable Development (IISD) organized a three-day Capacity Development Workshop on Inclusive Business Models on 6-8 June 2019 in Kigali, Rwanda. The workshop was organized within the framework of FAO’s Umbrella Programme Supporting Responsible Investments in Agriculture and Food Systems, and was a concrete follow-up to the recommendations of the 2018 International Symposium on Contract Farming and Other Inclusive Business Models. The workshop aimed to develop the capacities of producer organizations on contract negotiation and use of the FAO-IISD model agreement for responsible contract farming. It focused on:

• The Principles for Responsible Investments in Agriculture and Food Systems (CFS-RAI) and responsible contract farming;
• Application of the IISD-FAO Model Agreement on Responsible Contract Farming;
• Contract negotiation principles and skills;
• The role of producer organizations in promoting responsible contract farming;
• Inclusive business model innovations from Rwanda;
• Legal and contractual innovations to support women in contract farming.

The workshop brought together 25 representatives of producer organizations from Burundi, Djibouti, Kenya, Rwanda, Tanzania and Uganda. At the conclusion, participants highlighted that the capacity development on contract formation and negotiation equipped them with practical skills that they can now use to identify gaps in their existing contracts and when negotiating future contracts with buyers. Furthermore, the participants urged FAO and IISD to conduct such capacity development workshops at the country level, as this would greatly expand the impact for farmers and their organizations.

FAO and IISD will conduct a similar workshop with representatives of producer organizations in Asia later this year.

For more information:

Model agreement for responsible contract farming

UNIDROIT/FAO/IFAD Legal Guide on Contract Farming

Enabling Regulatory Frameworks for Contract Farming

The Principles for Responsible Investment in Agriculture and Food Systems

Contact: [email protected]