Contract farming arrangements involving smallholder farmers should be supervised

Nhlupheki Ncube

RECENTLY I came across a group of farmers who were grumbling about what they regarded as a bad deal that they had entered into with a private company. This was a contract farming deal designed as an outgrower scheme in the poultry sector.

The farmers were especially complaining of the production burden that is transferred on to their shoulders while the private company walks away with the product and the profits, they alleged.

While I obviously do not have the intricacies of the agreement details what was self-evident was that these farmers like is in the majority cases of contract farming arrangement, they just jaywalked into an agreement which they did not fully understand. Hence when the operation began to play itself out in terms of what is expected of them they scream blue murder.

This is the general trend with most contract farming arrangements as farmers just plunge into it blind-folded just being lured by the seemingly easy pickings but when the rubber hits the tarmac they realise it’s no stroll in the park.

They have to break the sweat perhaps more than they are used to and this immediately gives them the feeling that they are labouring for someone. In some cases the agreement could be genuinely lopsided in favour of the contractor or the input supplier and this is usually the case anywhere.

I have also interacted with some farmers screaming after unfavourable feedlot contract farming arrangements with some abattoirs. After reducing the whole feedlot process they went through into dollars and cents they realise they have been ripped off as they are left with very little in their pockets. This is by no means supposed to cast aspersions on all the feedlot arrangements that are entered between farmers and abattoir operators or any such players.

Others are mutually beneficial arrangements in which both the farmer and the contractor have walked away from the business arrangement with a reasonable magnitude of satisfaction. The important question to ask therefore, is how can farmers be protected from bad contract farming arrangements whose fine print is hidden in the sugar-coating that is used to lace the agreement. It is without doubt that most smallholder farmers have no capacity to interrogate and interpret a contract with a singular purpose of sniffing out hidden bad clauses. In fact, farmers will gladly sign simply because another fellow villager has signed and therefore, they take comfort and security in collective ignorance!

This pen proposes that it should be made mandatory for Government extension departments to be involved whenever contract farming arrangements are being made. The Government extension department will then use its expertise and resources to scrutinise these agreements and explain to farmers so that they fully understand what they are getting into. It will not be the department’s role to deter farmers from entering into agreements of their choice but just to scrutinise the fine print of the terms and conditions so that they are not way led into an obvious failure trap.

The devil is in the detail and if you do not take time to analyse what kind of devil you have invited into your bedroom you may live to regret ever meeting that company. The general tendency for most people is just to glide over terms and conditions and regard them as the usual gibberish of contracts but wait until that is flagged out as a provision that is now standing between you getting or not getting what you thought you were going to get.

It is important to note that companies or contract drafters invest a lot of time and words craftsmanship in the terms and conditions clauses because that is what is generally meant to protect them and them alone. One mobile operator in this country has a full chart of terms and conditions on one of its popular products. These terms and conditions are written in very small letters but they still manage to fill a whole chart and I know millions of users of that product have never read those terms and conditions, this writer included!

However, as it relates to smallholder farmers it is certainly in good keeping that they cannot just be left to their devices as they will be endlessly preyed on by the brutal capitalistic world out there. Government extension departments should simply be mandated to superintend over any contract farming arrangements involving smallholder farmers.

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