Determinants of smallholder farmers’ participation in contract farming in Zimbabwe: The case of command agricultural loans among resettled smallholder farmers in the Mutare district

T. Mafirakurewa and A. Mushunje

No 364822, 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: Agriculture plays a paramount role in the economy of many countries including Zimbabwe where more than 70 percent of the population depends on agricultural activities for their livelihoods. Smallholder farmers’ access to agricultural credit is vital for developing and growing Zimbabwe’s agricultural sector; hence, agricultural financing is crucial in rural development. Despite facing a myriad of challenges includingnatural disasters, climate change, and political and economic instability the Zimbabwean government is making efforts to provide affordable agricultural credit services to ensure food security to its majority, but smallholder farmers’ participation is still meager. The aim of this paper is to determine factors that influence smallholder farmers’ participation in contract farming in Zimbabwe, focusing on the case of command agricultural loans among resettled smallholder farmers in the Mutare district.To determine factors influencing A1 and A2 farmers` participation in command agriculture loans, double hurdle model was employed. The results revealed that gender, family size, farmer type, command agriculture education, and distance from the market (GMB) significantly determined smallholder farmers’ participation in command agriculture. While the educational level was proven to be insignificantly affecting smallholder farmers’ participation. The study evidenced that participation in the command agriculture program is a deniable opportunity for smallholder farmers in the study area, especially female farmers who are acquiring larger loans, revealing their passion for large-scale maize production. The government of Zimbabwe and stakeholders involved in command agriculture should collaborate with insurance institutions to provide crop insurance for farmers for compensation in case of crop failure by flood, drought, pest and disease attack, and heavy rains because farmers reported them being the most challenges hindering them from realizing their full potential in maize production. To increase the proportion of smallholder farmers participating in command agriculture, input suppliers should supply adequate inputs to farmers before the onset of the season so that farmers have adequate resources to use during maize production.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Pages: 18
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae23:364822

DOI: 10.22004/ag.econ.364822

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