Factors influencing broiler farmers’ participation in contract farming in Lesotho

Abstract

Broiler production is one of the major income generating activities for small-scale broiler farmers in both urban and rural areas, but the sector is currently facing production and marketing challenges in Lesotho. Contract farming as a means for organising the commercial production of both large scale and small scale broiler farmers has been viewed as an effective solution to the sector’s challenges in the tiny southern African Mountain Kingdom. Contract farming is practiced in Lesotho but there are very few Basotho farmers practicing broiler production through contract farming and as a result, the study assessed factors influencing their participation in contractual agreements in two large districts of Lesotho which are Leribe and Maseru. One hundred and eighty (180) broiler farmers were selected using multi-stage sampling techniques and data were collected through structured interview schedule. Data were analysed using descriptive statistics and binary regression model to address objectives one and two which are to describe contract farming arrangements that broiler farmers have with agro firms and to identify factors influencing broiler farmers’ participation in contract farming in Lesotho respectively in this study. Descriptive results showed that broiler farmers (45%) participated in contract farming, while 55% participated in non-contract farming. Empirical results of the binary regression model revealed that broiler flock size (β=1.720, P<0.05), farming experience (β=0.784, P<0.05), farmer group/association membership (β=1.031, P<0.05), access to marketing infrastructure (β=0.699, P<0.05), access to extension services (β=1.950, P<0.05) and knowledge of grades and standards (β=1.600, P<0.05) influence participation in contract farming in Lesotho. Based on the findings, it is concluded that socio-economic, institutional and technical factors influence participation in contract farming which proves to be an efficient mechanism for production and marketing of agricultural products in the value chain in Lesotho. It is recommended that these factors be taken into consideration by national policy making authorities in the design and development of effective marketing structure for the products of broiler farmers in the country. Key words: contract farming, participation, broiler farmers, factors, binary regression, influence