An assessment of the performance of small-scale Farmers who supply fresh fruits and vegetables to Supermarkets in Zambia

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Mizinga, Wendy M.
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The University of Zambia
Contract farming can be defmed as a form of vertical integration within agricultural commodity chains, such that the firm has greater control over the production process, as well as the quantity, quality, characteristics and the timing of what is produced. (Likulunga 2007, Prowse 2012).Many developing countries like Zambia face a critical need to exploit the potential of contract farming as an institution that can assist linking small scale farmers to supply chains, (Little, 1994; Watts, 1994, Kristen and Sartorius, 2002).This study was carried out in Lusaka province with the aim to assess the performance of small scale farmers who supply fresh fruits and vegetables (FFV) to supermarkets in Zambia. The objectives of the study were to determine the difference in gross margins between contracted and non-contracted FFV farmers, to find out the factors that determine farmers' participation in FFV contract farming and to identify the opportunities and constraints of FFV contract farming. The primary instrument used to collect data was a structured questionnaire. Descriptive statistics were generated using SPSS. A sample size of 91 farmers was used with 44 of them contracted with Freshmark and 47 who sold to local markets. Parameters hypothesized to affect farmer's participation in FFV farming were estimated using the PROBIT model. Among the factors that were found to be significantly important at 95% confidence level included; the age of farmer (p=0.067), gender of farmer (0.061), ownership of vehicle (p=0.000), farming experience (0.05), household income (p=0.000) and membership of farmer to a cooperative (p=0.073). Gross margin analysis was also conducted which showed that the gross margins of farmers who participated in contract farming with Freshmark were higher than for those farmers who sold to local markets. It was also found that being contracted to a supermarket had more benefits than challenges. Increasing the number of farmers who participate in contract farming therefore can lead to increased outputs in the agricultural sector and improvements in incomes of farmers. Farmers must thus be provided with incentives by supermarkets that would encourage them to participate in contract farming and they must also be educated on the benefits of FFV contract farming.
Farms, Small-Zambia , Fruit Produce-Zambia , Vegetable Marketing-Zambia