IJERD – International Journal of Environmental and Rural Development (2021) 12-2

Research articleerdFarmers` Perception on Contract Farming:
A Case of Sunflower Seed Crop in Central Tanzania
RUBASHA MATIKU MUJAMA*
Graduate school of Agriculture, Tokyo University of Agriculture, Japan
Email: mujamarubasha85@gmail.com

TOMOHIRO UCHIYAMA
Faculty of International Agriculture and Food Studies,Tokyo University of Agriculture, Japan
Received 23 January 2020

Accepted 24 September 2021(*Corresponding Author)

Abstract In most developing countries like Tanzania, poor farmers have limited access toagricultural inputs. In case of sunflower seed, one of the proposed solutions is through use ofcontract farming among the farmers. In the country, sunflower oil has been preferred as ediblecooking oil for many households since it is much safer for human consumption. Despite thegovernment’s new agricultural policy, contract farming has been facing some challenges incoordination such as pricing, trust, arrangement for the delivery of the inputs, procedures forpaying farmers, poor credit (cash) services as agreed of the contract. The study aims toinvestigate the impact of contract farming program among sunflower farmers. Specifically,
the study aims to (i) determine households’ background characteristics; (ii) examine contract
arrangement of sunflower seeds in Tanzania; (iii) discuss the farmers’ perception in termsof trust, and personal relations play for their coordination. The field study was conducted inAugust and September 2019, selecting 80 farmers in two regions in Central Tanzania. Amongthem 40 farmers were sunflower producers with contract farming with Three Sisters
Company Ltd and Ikungi Sunflower Edible Cooking Oil Company for eight (8) years; 40farmers were sunflower producers without contract farming. Based on the field study,contract terms and conditions, hereafter called contract design attributes such as mode ofpayment and price setting of farmers’ crop produce can affect farmers’ decisions toparticipate in contract farming, varyingly affecting their expected level of utility fromparticipation. On the other hand, in contract farming, farmers produce quality seeds withhigh cooking oil content. Surprisingly, in contract terms, prices are not set in advance,
contract farmers sell their produce with similar price to the local sunflower seed. Finally,lack of education was the factor for non-contract farmers to participate in contract
farming.
Keywords contract farming, sunflower seed crop, Central Tanzania

INTRODUCTION
Contract Farming (CF) among sunflower farmers in Tanzania has been developed widely since 2010
as an alternative approach to solving the problems faced by farm households and provides a securepurchaser for their production. At the same time, households receive the necessary inputs for theirfarm and advice on necessary farming techniques, while the buyers benefit from assured production
from the contract farming (SDC, 2018). Due to its low level of cholesterol, sunflower oil is highly
preferred as edible and safe cooking oil for many households in the country. The crop accounts 40%of the total national cooking oil requirements (URT, 2014). For the country-side, contract farming
policy attempted to reduce the burden of importing edible cooking oil from foreign countries byoffering opportunities of high yield varieties together with aim of income generation to farmers.
Despite the government’s new agricultural policy, contract farming has been facing some challenges
in coordination such as pricing, trust, arrangement for the delivery of the inputs and procedures forpaying farmers.
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IJERD – International Journal of Environmental and Rural Development (2021) 12-2OBJECTIVE
The study aims to investigate the impact of contract farming program among sunflower farmers.
Specifically, the study aims to (i) determine households’ background characteristics; (ii) examine
contract arrangement of sunflower seeds in Tanzania; (iii) discuss the farmers’ perception in termsof trust, and personal relations play for their coordination.
METHODOLOGY
The field study was conducted in Dodoma and Singida regions located in Central Tanzania in Augustand September 2019. Region and district were sampled purposively due to the potentiality inproduction of sunflower seed at the central corridor. In addition, contract farming has been promoted
to sunflower farmers since 2019. These regions are located in semi-arid area characterized byinadequate rainfall. Recently, there had been a tremendous shift of the population in these regions
towards farming sunflower seed crop. The crop is drought tolerant and survives harsh conditions.
The study adopted a semi-structured questionnaire as an instrument for data collection. Bothqualitative and quantitative methods of data collection were applied. Secondary data were obtained
from the two companies providing sunflower contract farming in Central Tanzania, sunflower
farmers, ministry of agriculture and rural development, published reports, books and journals.
Educational status, the level of awareness and willingness of the respondents to participate in contract
farming was collected.
Considering the observation, a sample of 80 farmers were selected from Dodoma and Singida
regions (Fig. 1). Among them, 40 farmers were sunflower producers with contract farming withThree Sisters Company Ltd and Ikungi Sunflower Edible Cooking Oil Company for eight (8) years;
40 farmers were sunflower producers without contract farming. A two-stage sample design was used
to collect the data. First, two villages were purposefully selected because of the presence of sunflower
contract farming. Then, the contract farmers were randomly selected from the list of contracted
farmers, and non-contract farmers were randomly selected from the village households list after
removing the contract farmers.

CentralTanzania

Fig. 1 Map of study areaSource: https://www.google.com/united-republic-of-Tanzania-map-vectorⒸ ISERD66

IJERD – International Journal of Environmental and Rural Development (2021) 12-2

RESULTS AND DISCUSSION
This study employed data analysis techniques namely descriptive statistics and parametricestimations. Descriptive statistics such as frequencies means, and cross tabulation of some criticalvalues were used to compare basic characteristics of farmers who participated in contract farming
and farmers who did not participate.
1) Households’ Background Characteristics
From the field study it was found that sunflower farmers with contract farming were older (42.3years) than sunflower farmers with non-contract farming (37.1 years). This implies that the elder
farmers participate in contract farming compared to younger farmers. Moreover, with respect to thefarm size, sunflower producers without contract farming were relatively small (0.82 ha) compared tosunflower farmers with contract farming (2.41 ha) as shown in Table 1.
Considering the education background, contract farmers have reached high school level andcollege level. But, majority of heads of household producing sunflower seed without contract farming
have reached to primary level only (Table 1).
Table 1 Households’ background characteristics
Contract farmers(n=40)
MeanSD
Characteristics
Age of heads of household (years)
Average cultivated area (ha)Gender of farmers
MaleFemale
Farmers' education
Primary level
Secondary level
High school level
College level
University level

Non-contract farmers(n=40)
MeanSD

42.30
2.41
Number offarmers

7.06
1.20
Percentage
of farmers

37.10
0.82
Number offarmers

6.82
0.40
Percentage
of farmers

32
8

80.0
20.0

1228

30
70

26
41
90

65.0
10.0
2.5
22.5
0.04000001000000

Source: Authors’ computation based on the data collected from field survey, 2019.
Note: (1) SD refers standard deviation (2) Primary level is seven years of schooling (3) Secondary level is four yearsof schooling (4) High school level is two years of schooling (5) College level is two years of schooling (6)University level is three to four years of schooling.

2) Contract Arrangement of Sunflower Seeds in Tanzania
The use of contract farming in the production of sunflower in Central Tanzania began in the 2010/11
crop season. Major actors in sunflower contract farming are the farmers, the company and thegovernment of Tanzania. The contract states the obligation of the company, farmers, and otherfeatures. In the contract, the company obligate itself to deliver improved seeds to farmers usually of
the record-type, buy up all the produce grown from the seeds provided to the farmer. In addition, theprice is not fixed, and the contract firm buy the produce at the farm gate price and sometimes bynegotiations. The cost of the input seeds is deducted at the period of selling of produce afterharvesting.
In the study area, both Three sisters in Dodoma and Ikungi Sunflower Edible Cooking Oilprovide a long-term contract for a period of eight (8) years cropping season. In production, individual
sunflower farmers organize themselves into contract farming and non-contract farming. The contract
company provides inputs such as fertilizers, seeds, and pesticides. The contract is through verticalⒸ ISERD

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coordination and major support institutions in sunflower contract arrangements are Rural LivelihoodDevelopment Corporation (RLDC), Private and Small Medium Sunflower Oil Processors andInternational Agriculture Non-Government Organization (NGOs) as shown in Fig. 2.

Fig. 2 Coordinating production and contract arrangement of sunflower seeds in Tanzania
Source: Field survey, 20193) Farmers’ Perception in Terms of Trust, and Personal Relations Play for their Coordination
To understand the farmers’ perception in terms of personal relations play for their coordination, theGarret ranks were calculated based on the data obtained in the field survey 2019, by using appropriate
Garret Ranking formula. This method provides out the most significant factor which influences therespondent.
Percent position = 100 (Rij – 0.5)
Njwhere Rij = rank given for the ith variable by jth respondents, Nj = number of variables ranked byjth respondent.
Table 2 Farmers` perception in terms of trust personal relations playfor their coordination
Serial numberConstraint

Garret Score

Rank

12
3

Mistrust in the mode of payment
Lack of government monitoring
Price of produce

63.0
58.0
55.0

123

Source: Field survey, 2019In terms of trust and personal relations, the study noted a prevailing mistrust between the twoparties in the mode of payment on crop produce (63.0 Garret score). Farmers were arguing that; thecost of inputs were inflated to maximize companies` profits. In an interview with one farmer, shesaid; “ After harvesting sunflower I take them to XXX company that I have a contractual agreementwith. But, honestly, I am not satisfied with the costs of inputs, I think they tend to inflate them…”(Interview, 2019). Moreover, contract farmers did not have written signed contract papers. Anotherimportant factor is lack of government monitoring (58.0 Garret score). In the study area farmers
reported that the contracts are not well monitored by the ward and village officers that are responsible
to oversee compliance. Therefore, the absence of proper government control discourages smallⒸ ISERD68

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holder participation in contract farming. In addition, price of produce was reported as anotherchallenge among farmers (55.0 Garret score). In contract farming, farmers produce quality seeds withhigh cooking oil content. Surprisingly, in contract terms, prices are not set in advance, contract
farmers sell their produce with similar price to the local sunflower seed. Based on this finding, noncontract farmers were not willing to participate in contract farming.
CONCLUSION
The study aims to investigate the impact of contract farming program among sunflower farmers. It
was indicated that contract terms and conditions, hereafter called contract design attributes such asmode of payment and price setting of farmers’ crop produce can affect farmers’ decisions toparticipate in contract farming, varyingly affecting their expected level of utility from participation.
In other words, lack of education was the factor for non-contract farmers to participate in contract
farming.
In relation to the findings and conclusion the following were recommended to alleviate theexisting challenges by all stakeholders of this sector. First, there is a definite need for the governmentof Tanzania to monitor and ensure that both parties adhere to the contract terms. In addition, priceshould be set in advance and reflect the quality of the crop. This will increase the willingness offarmers to participate in contract farming.
ACKNOWLEDGEMENTS
We would like to express our gratitude to Tokyo Nodai Foundation and Graduate Research Funding
Program from Tokyo University of Agriculture Research Institute (NRI) for financially supporting
this study.
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