Plantations, Contract Farming and Commercial Farming Areas in Africa: A Comparative Review

The LACA Working Paper series publishes work in progress by LACA team members. All papers are technical research papers which have been peer reviewed, and are available in open access format. Please consult the project web pages at http://www.future-agricultures.org/laca or be in touch with the author(s) for further information. 3 Executive summary Introduction There is uncertainty and no small controversy surrounding the potential impacts of commercial agricultural developments that are being proposed for sub-Saharan Africa by domestic governments and foreign investors. Much of the debate concerns how Africa's rural poor could be affected. One response is to look back and review what the outcomes have been from earlier such developments. This should include consideration of the institutional setting to help us understand how institutions influence the character and outcome of commercial agricultural schemes. This working paper assesses the historical experience of three farming models that have figured in recent investments in sub-Saharan Africa: plantations, contract farming and commercial farming areas. Based on a literature review, the paper concentrates on the involvement of, and effects on, rural societies in and around the area where the schemes were located. It looks mainly at sub-Saharan Africa but also considers case studies from Latin America and Asia. Defining and theorising the three farming models Plantations grow one main cash crop; require capital investment; are larger than an average-sized holding although some land may be left uncultivated; rely on hired resident or non-resident labour, often including migrant labour; and are centrally managed. Ownership may be foreign or domestic, private or corporate. With contract farming, farmers agree in a written or verbal contract to supply produce to a buyer, usually at a predetermined price, on a specific date and to a certain quality. There are several variants. One that may involve large-scale land acquisition is nucleus outgrowing, where contracted smallholders complement production on a central estate. Lastly, a commercial farming area constitutes multiple private commercial farms of medium or large scale that are more or less contiguous in an area. Commercial farming areas or blocks have been documented in Africa throughout the twentieth century, and in recent years there have been signs of increased activity and political rhetoric around such developments. Academic analysis of the three models has been dominated by approaches from mainstream neoclassical economics and Marxist political economy. Early work from dependency and labour theory considered the socioeconomic impact of plantations in developing economies. …