Small-scale maize farmers' decision to participate in contract farming: Implications for integration into the marketing chain

Abstract

In this study, the determinants of participation in contract farming by small-scale maize farmers were investigated. The probit model was used to estimate the coefficients in the empirical model. The results indicated that for farmers with access to information, training, farming systems, extension visits, membership in farmer organisations, and household income, and the probability of participating in contract farming was high and significant. However, for farmers with remittances and post harvest losses, the probability of joining contract farming was low and significant. Policy implication suggested educating farmers who receive remittances about the extra benefits in contract farming to integrate them into the marketing chain. Again, the study suggested policies that provided adequately trained and equipped extension officers for dissemination of technologies that have the potential to reduce post harvest losses to assist farmers to obtain enough farm income to expand their areas of operation and attract firms offering contract farming. Key words: Panel data, contract farming, probit model, small-scale farmers.