distribution of inputs dominated the services inputs supplied to Zambian farmers. Finally, as a result of participating in a contract, many farmers in all three countries engaged in new tasks.

It is important that being part of a contract does not necessarily mean that the farmer is part of a value chain. However, it would be safe to say that being part of a contract brings the farmer “close” to a value chain. Therefore, being part of a contract is an important but not sufficient criterion for a farmer to be part of a value chain. In general, farmers on a contract with knowledge about their participation in value chains tend to lead in upgrading and labor productivity.

# **5. Does Participation in International Value Chains Really Matter to Farmers?**

Our surveys reveal that the main contractors were processors and traders, specifically the milling companies or the food reserve agencies, seed companies, and breweries. Of the farmers under contract, about 50 to 60 percent of the interviewed farmers in Ghana and Zambia knew about their participation in value chains. The majority of the farmers interviewed in Kenya had no knowledge about the usage of their crops (figure 5). The farmers were often unaware of the final destination of their output beyond their first buyer. This was primarily because the farmers were mostly concerned about being remunerated for the output sold, regardless of whether they were on a contract or part of a value chain. Even if farmers know that the buyer may export their product, they would not necessarily be aware of whether _their_ product is being exported, and even if they know that it is being exported, they may not know by _what_ amount. This is because a buyer usually purchases from multiple farmers and may export all of the product or part of it.

The explanations received from the Zambian noncontract farmers for not being on a contract highlight two key issues: lack of knowledge of any buyers and lack of trust in engaging with intermediaries. The conditions of price discovery are worse for most noncontract farmers. Buyers’ lack of knowledge also includes that related to spot buyers.

# **_Key Characteristics of Value Chains from Qualitative Surveys_**

Crops produced under contract are mainly sold to contractors or their intermediaries. Most farmers participate in a domestic value chain, with products rarely traded across borders. However, some of the value chains stretch across borders, as some of the processors’ products reach markets outside the country of production.

- For example, maize produced in Zambia is sold to the Democratic Republic of Congo, Malawi, Zimbabwe, and Kenya through the various players in the chain. In addition to exports of raw grain, maize is also sold in processed form, like mealie meal, nonalcoholic drinks, and breakfast cereals, which are the outputs of national maize value chains.

- Cassava produced in Zambia is sold in the Democratic Republic of Congo and used in the copper mining sector as HQCF (85 percent starch), thus fitting into RVCs. Encouraged by the Government of Zambia, there are also efforts by ZB to use HQCF in the brewing industry, to make cassava-based beer.

- Cassava produced in Ghana is used in the brewing (dough) and food (fresh or processed) sectors as well as in the manufacturing industry (HQCF, as a source of starch), with some of the starch being exported.

- Kenya is largely a net importer of maize and gets some of it from Tanzania and Uganda. Kenya largely consumes what it produces within the country, but with transportation from surplus to

34