Making Contract Farming Arrangements Work in Africa’s Bioeconomy: Evidence from Cassava Outgrower Schemes in Ghana

Poku, A.-G., Birner, R., and S. Gupta (2018): Making Contract Farming Arrangements Work in Africa’s Bioeconomy: Evidence from Cassava Outgrower Schemes in Ghana. Sustainability 2018, 10(5), 1604; https://doi.org/10.3390/su10051604

http://www.mdpi.com/2071-1050/10/5/1604

Abstract

This paper uniquely focuses on rapidly-developing domestic value chains in Africa’s emerging bioeconomy. It uses a comparative case study approach of a public and private cassava outgrower scheme in Ghana to investigate which contract farming arrangements are sustainable for both farmers and agribusiness firms. A complementary combination of qualitative and quantitative methods is employed to assess the sustainability of these institutional arrangements. The results indicate that ad hoc or opportunistic investments that only address smallholders’ marketing challenges are not sufficient to ensure mutually beneficial and sustainable schemes. The results suggest that firms’ capacity and commitment to design contracts with embedded support services for outgrowers is essential to smallholder participation and the long-term viability of these arrangements. Public-private partnerships in outgrower schemes can present a viable option that harnesses the strengths of both sectors and overcomes their institutional weaknesses.

Keywords: contract farming; contract design; cassava; bioeconomy; Ghana