The use of contract farming, which constitutes a subject of current debates, especially on the issue of whether or not participating farmers improve their welfare and thus contribute to the local economy as an agricultural intervention is being adopted by many African countries including Mozambique. The Mozambique government adopted contract farming which is being implemented in the central region, mainly involving production of cash crops (Tobacco, cotton and sugarcane) using smallholder farmers. To this end, this study was carried out to assess the effect of contract tobacco farming on the welfare of smallholder farmers in the district of Angonia in Mozambique. Data were collected using questionnaire from 359 randomly selected farmers. Checklists with 27 focus group discussions, 67 key informants’ interviews were also used. The results show that some farmers are able to improve their welfare as a result of their participation in contract farming. Although farmers are motivated by income generation, the contractor offers low prices which result in low returns and debts accumulation by farmers. Considering these, the study concludes that contract tobacco farming is dysfunctional, as it fails to improve the welfare of farmers. The findings of this study offer guidance on how contract farming should be organised so that both parties involved in contract can benefit and improve the chance of a win-win situation. The study further generates useful information that evaluates the subsector in terms of its contributions to the local economy.
Key words: Contract tobacco farming, welfare of farmers.
Copyright © 2018 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0