Contract farming is set to gather momentum as pressure piles on multinational food companies to address growing food demand and consistency in the supply chain, with delegates at the Inaugural two-day International Conference on Contract Farming in Africa pointing to the lack of contract laws and weak policies as immediate challenges.
- The Kenya National Chamber of Commerce and Industry (KNCCI), Kenya Private Sector Alliance (KEPSA), and the Kenya National Farmers Federation (KENNAF) are some of the key strategic partners for the conference.
- Industry experts, including representatives from the Food and Agriculture Organization (FAO) and the International Finance Corporation (IFC), participated in sessions covering essential topics, such as Contract Farming Models in agriculture and livestock value chains, Seed technology, fertilizer use, and soil health, Policy support for contract farming, financing solutions for sustainable farming.
- The conference also examined critical issues such as the formation of stronger farmers associations to ensure equitable negotiations, transparency, and enforceable contract terms.
“Consistency in food supply and accountability are key factors driving multinational food companies into contract farming to sustain the value chain. We are foreseeing many contracts farming being signed in the coming years as an alternative to addressing the accountability and demand challenges in the international markets,” Eric Ogumo, International Finance Corporation (IFC) Consultant on Agribusiness said during the conference.
“The downside is that majority of the contracts we are witnessing across the Sub-Saharan Africa are undocumented which further exposes local farmers to exploitation, they might find themselves vulnerable if they lack negotiating power, education on contract terms or legal protection,” he added.
While noting that Kenya had formulated policies and framework such as the Agricultural Policy 2021 that promote and strengthen contract farming systems, CS Agriculture and Livestock Andrew Karanja noted that operational challenges mar the effective implementation and enforcement of contract farming laws.
“Some of the major issues include contracts not being registered with the relevant authorities, making it difficult to resolve disputes or hold parties accountable, and large agribusinesses often have the upper hand in negotiations, leaving smallholder farmers vulnerable to unfair contract terms and pricing mechanism,” he said adding that many farmers lack awareness of their rights or access to formal arbitration processes.
“In Kenya, it has already shown success across sectors, from tea to horticulture, by linking smallholders to global markets and improving livelihoods. Let us remember that contract farming’s true potential lies in collaboration—between companies, governments, financial institutions, and farmers, which can transform agriculture, empower farmers and unlock economic potential for the continent and the future of sustainable agriculture,” Sunflower Events Managing Director Peris Wanjiku said.
Carole Kariuki, Chief Executive Officer of KEPSA, urged the government to support the farmers by providing agricultural extension services, “Contract farming calls for consistency and quality production and as the private sector we have been working with companies in contract farming. Farmers need to be supported by the government so that they can match the required standards,” noted Carole.
