Contract Farming

By Saintly Ngwenya

I have experienced many farmers getting excited each time their contract farm applications are approved. Many farmers have a feeling that they have just won a lottery and all their farming problems are going to disappear. Most of these contracts do provide almost all the inputs required for the production cycle. However, the joy on most farmers turn into tears during harvesting and selling time. It is not an uncommon occurrence to see farmers losing all their yields to repay the loans, and in most cases some of their livestock and household equipment are attached as part of loan repayment.

We have decided to take our time and advice farmers on how best to approach contract farming using our field experiences. Contract farming is a good method of farming and if handled well it produces excellent results. The first thing that is required is to understand the nature and terms of the contract before signing it. Farmers have a right to request the contract to be written in a language they easily understand, even in vernacular. Moreover, they should request someone they trust to explain to them all the terms of the contract. We have noted that most contract forms are written using some complicated terms that are usually beyond the comprehension of ordinary farmers.

The other important factor which farmers need to know is that the terms in the contract can be altered in cases where they do not agree to everything written. For example, on amount of inputs the farmer gets, they not entitled to take all the chemicals or services being provided in the contract. By limiting these unnecessary expenses, a farmer will also be reducing the debt and making repayment easier. Farmers should not be forced to accept everything before they sign the contact agreement. It should be noted that where terms of contract cannot be altered, the agreement usually is unfavourable to the farmer.

Another factor to note before putting ink on a contract form, is the repayment part and collaterals. Farmers should be able to negotiate on loan repayment in a way that they will make a profit. We have noted that some of the inputs on a contract are exorbitant and affects the budget negatively. Therefore, farmers have to raise concerns on this matter. In addition, farmers should not allow the contract terms to attach their other properties like farming equipment, livestock and yields from other crops. We have cases of many farmers who are left worse than they were by some contract farming.

In conclusion, we encourage farmers to take their time in going through the contract before agreeing to any terms. The excitement that we usually see when farmers get these contracts should also be the same when they have harvested. Since farming is a business, our goal is to see farmers making profits in any kind of farming they get in to, particularly contract farming.

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