Sugarcane Outgrowers’ Views on Contract Farming Services Quality in Kilombero Valley, Tanzania

Abstract

Contract farming (CF) promises many benefits for sugarcane outgrowers in many cases. However, studies debate on whether sugarcane smallholder farmers get quality services from CF relations. As a response to the debates, this paper provides a systematic analysis of two issues critical to the performance of sugarcane contract farming in Kilombero Valley: the extent to which farmers are satisfied with the services received through farmers’ associations and the satisfaction status of farmers on contract farming services the sugarcane buyer offers. The paper also determines the associations between farmers’ views on satisfaction with CF services and their household characteristics. The paper adopted a cross-sectional study design in which 300 outgrower farmers were interviewed. Data were analysed using IBM Statistical Package for Social Sciences (SPSS) Statistics, and Microsoft Excel. The paper used SERVQUAL model, adapted to the sugarcane contract farming context. Through the model, five dimensions (tangibles, reliability, responsiveness, assurance and empathy) were tested to find gaps that exist among some smallholder farmers regarding perceived and expected quality in the CF services coordinated by farmers’ associations. The results demonstrate that empathy was the most deficient dimension of contract farming services quality. Also, there were high deficiencies on quality control, price setting as well as weighing sugarcane consignments at the Mills’ gates. Cross tabulation and chi-square test revealed that there was a significant relationship between satisfaction with the timing of payment for the sugarcane they sold and household size. It is recommended that empathy should be tackled first by the farmers’ associations before other dimensions. Both farmers’ associations and the buyer should be active initiators of cane supply agreements.