Impact of Sugarcane Contract Farming Arrangements on Smallholder Farmers’ Livelihood Outcomes in Kilombero Valley, Tanzania

Abstract

Sugarcane Contract Farming (CF) has been mentioned to be an important practice and an engine for improving livelihoods among farmers in Africa. However, in Tanzania there has been limited research on explaining the impact of sugarcane contract farming arrangements on smallholder farmers’ livelihood outcomes. The purpose of this paper was to determine the impact of sugarcane CF arrangements on smallholder farmers’ livelihood outcomes. The specific objectives of the study (from which this paper is based) were to: (i) identify CF arrangements experienced by smallholder farmers, (ii) measure levels of livelihood outcomes, and (iii) determine the impact of CF arrangements on smallholder farmers’ livelihood outcomes. Data were collected from 300 sugarcane outgrowers in February and March 2014 in Kilombero Valley using a structured questionnaire and an interview guide used for interviews with 14 key informants. Data were analysed descriptively and inferentially whereby the multiple (linear) regression model was used to determine the impact of some CF arrangement’ variables on farmers’ livelihood outcomes. The findings indicated that CF arrangements, variables such as price negotiations made by farmers’ association leaders, sugarcane harvesting arrangements, loans or goods by farmers and the payments follow up made by farmers’ association leaders for the sugarcane sold; expose smallholder farmers to higher risks of low livelihood outcomes. It is recommended that the Sugar Board of Tanzania and farmers’ associations should make sure that the few CF arrangements which negatively affected farmers’ livelihood outcomes are addressed timely. It is recommended that contractual supports provided by sugarcane farmers’ associations should increase farmers’ association leaders’ ability to negotiate for better prices of their sugarcane outputs.