Contract Farming, Agribusiness, and Land in Africa

Abstract

Abstract This chapter examines the impact of contract farming on land relations in Africa in the light of recent debates on this topic. It argues against the thesis that contract farming provides a more equitable solution to agricultural modernization than does the expansion of large estates and provides avenues for smallholder farmers to be incorporated into agribusiness food chains. It shows that contract farming often integrates smallholder farmers on unfavorable terms in which most of the surplus value is captured by agribusiness. Agribusiness also supports the expansion of medium-scale farmers and enterprises into agri-food chains to lower costs of production through higher turnover and as a way of integrating smallholder farmers into agrarian value chains. As a result of the concentration in agribusiness, the relationship between transnational corporations and farmers is mediated by subsidiaries and service providers, including civil society organizations, financial institutions, farm enterprises, and input suppliers. Several of these intermediaries have a direct interest in accumulating land, often at the expense of the rural poor. This expropriation of land is often shrouded under various community-participation models and benefit-sharing arrangements that enable the commercial entities to gain control of valuable resources, while the communities retain formal titles to land. The chapter shows that these developments have been facilitated by recent governance reforms that promote market-based reform but frown upon socially redistributive reform. To understand these transformations, the chapter traces the history of contract farming in Africa and the changes that have occurred throughout the process of liberal market reform.