Managing the project

Introduction

Poor management can cause potentially promising contract farming ventures to fail. This chapter describes the steps that managers must take in order to coordinate production activities and the delivery of products by farmers to the processing and/or marketing facilities. Stress is placed on the need to carry out all activities in a transparent and participatory fashion so that the farmers fully understand their obligations and those of management. For this to be achieved, the maintenance of harmonious relations between management and contracted farmers is essential.

COORDINATING PRODUCTION

A number of specific organizational and administrative activities have to be carried out before production commences. The key issues that managers must address in advance are:

• identifying suitable production areas;
• selecting farmers;
• forming working groups;
• providing material inputs;
• providing logistical support; and
• purchasing the product.

Identifying suitable production areas

Following the choice of a suitable physical and social environment (Chapter 2), management must then select specific areas that can provide easy access for extension and logistical services. It is usually important for the contracted farmers to be situated relatively close to the company's processing or packing facility. Not only does this allow perishable produce to be processed without delay but it also permits management and technical and extension staff to be based at one centralized location. The raw material for many crops (e.g. oil palm, leaf tea, sugar cane) is far more bulky than the finished product, and by locating the processing facilities closer to the primary producers transport costs can be minimized.

There are, however, situations where it is more practical to spread production over a larger area. This may be when farmers are situated in many districts and channel their production to a number of processing units controlled by a single sponsor. The cultivation of crops in different areas can also reduce the risk of total crop failure due to irregular weather patterns or disease. Such a strategy helps to guarantee a regular supply for processing and marketing. In such cases it is more convenient for extension officers to reside in or near their areas of responsibility. At times the most advantageous areas for growing the crops may not be the most logical locations for a factory. Vegetables for canning, for example, can sometimes be grown long distances from the factory. A canner in the Philippines organized farmers situated over a wide area to grow both sweet and baby corn to take advantage of climatic variations in order to maintain regular supplies throughout the year. In Kenya, French beans for canning are grown between 150 and 230 kilometres from the factory because the climate in the production area allows for the beans to be grown under rain-fed conditions. Where several areas are chosen, they must all be able to provide a sufficient quantity of production to ensure that services provided to the farmers can be carried out in a cost-effective manner.

Selecting farmers

Following the choice of production areas the next requirement is to select farmers. Management must decide how many farmers should be offered contracts and the criteria for their selection.

Farmers can be approached individually, through the offices of agriculture departments, through community leaders and farming cooperatives, or by an open invitation to apply. Selection criteria should be based initially on an assessment of the suitability of the farmers' land and confirmation of their tenure security. If those two conditions are met, an evaluation needs to be made of the prospective contractor's farming experience, past production record, desire to cooperate and the extent of his/her family labour inputs. All selection appraisals must take into account the complexity of the household economy and examine how the contracted crop can be incorporated within the farmer's total farming mix.

Community leaders and local government officials are, in general, dependable sources of knowledge on the capabilities and attitudes of farmers in their villages and districts. Managers should be aware, however, that petty rivalries and extended family obligations are characteristics of some rural societies. Farmer selection therefore should also be judged on the manager's own intuition and available independent assessments. In the case of the production of French beans in Kenya, mentioned above, the factory uses local government administration, government agricultural extension offices and its own field staff to select farmers. Criteria used for selection are soil type, the agricultural experience, competence and reliability of the farmers, combined with their ability to cooperate with others.

While failure to select some farmers may cause resentment, the arbitrary selection of farmers who fail to produce the desired quality and quantities can be commercially disastrous. In one venture in Thailand, for example, farmer selection for the cultivation of vegetables for canning was deemed to be very lax. Because of high product demand and land shortages, the company accepted virtually all farmers. Furthermore, application forms were circulated after most farmers had signed their contracts, a practice that caused an atmosphere of confusion and uncertainty.³³ Managers should, wherever possible, verify that the production potential of any district is in excess of their requirements in order to provide them flexibility to choose the most qualified farmers.

The criteria for farmer selection are likely to vary according to the type of crop. Less rigorous standards can be adopted for short-term seasonal crops in that farmers who fail to perform can be excluded from subsequent contracts. For tree crops, however, a long-term commitment is required and thus sponsors need to be assured of the reliability of the farmers and of their ability to continue to farm for many years. In an oil palm venture in Ghana, for example, the majority of the selected farmers were "veterans" with at least twenty-five years experience. This resulted in an age and marital composition that could be expected to raise constraints for future production because there were few younger farmers and the farmers were limited to immediate family labour only.³⁴ Transmigration or settlement schemes in a nucleus estate context involve the risk that the farmers will be unhappy in their new environment and wish to return to their original homes. Rigorous selection procedures can minimize, but not altogether avoid, such risk.

Box 12 The role of farmer groups in Colombia The Passicol Company of Colombia contracts out blackberry, passion fruit and papaya production to 14 work groups or associations comprising approximately 400 farmers. The company has an agreement with these farmer groups or associations who then subcontract to their members. The company has no direct dealings with farmers in so far as crop production is concerned. The role of the associations is to: inputs to the farmer; collect all produce from farmers; guarantee the contracted volume to the company; provide infrastructure to store and grade production; and arrange finance for farmers from public and private institutions. The associations recover administrative and overhead costs out of the payment from the company before settling accounts with the farmers.

Crops such as cotton, maize, tobacco and vegetables are grown under contracts that are normally reviewed and renegotiated on a seasonal basis. Periodic reviews allow for pricing and technical adjustments at the beginning of each season, for new farmers to be registered and, where appropriate, for the quotas of farmers who are less productive to be reduced to levels they can reasonably manage. When a farmer requires the use of outside labour, an assessment of the availability of such labour and the farmer's ability to manage it will be necessary.

Forming working groups

Although a company usually deals with farmers directly through its extension service, it can be advantageous to organize small-scale farmers into groups. Such groupings can serve a number of functions such as taking joint responsibility for credit or cash advances, monitoring applications for inputs and arranging for the delivery of inputs and collection of the crop after harvest. Formally organized groups can provide suitable units for delivery of extension advice. In Malawi, for example, tea growers under one contract are divided into twenty-one blocks. Each has a committee responsible for matters such as settling disputes and ensuring that members follow the recommended crop husbandry practices and abide by the conditions of the contract. Some tenant tobacco growers in Malawi are also divided into blocks, with each block having a leader who organizes group activities, including a seedling nursery and soil-conservation activities. The farmers apply fertilizer to their fields as a group in order to avoid diversion of the fertilizer to food gardens or to the open market.

The largest cotton company in Zimbabwe supplies inputs to self-selecting farmer groups. The whole group is penalized if one member defaults, so there is an incentive for peer policing to ensure repayment. Monetary rewards are given to groups with high repayment rates. On the other hand, defaulters are followed up quickly and assets can be seized. The company originally established groups with a minimum of fifty farmers, but experience has shown that to be too many and it now works with a maximum of twenty-five farmers per group. A company that exports vanilla from Uganda works through groups of farmers organized into local associations. The associations play a leading role in selecting suitable farmers, recovering loans and bulking up the vanilla for purchase.³⁵ Similarly, Box 12 presents an example of farmer groups or associations who control production, with the sponsor having direct contact with farmers only when conducting training programmes.

Providing material inputs

The provision of material inputs to farmers is an important feature of contract farming. Before the start of each season, managers should calculate the pesticide and fertilizer requirements for each farmer based on his or her production quotas. Material advances can, on occasions, extend to the financing of draught oxen and horses, ploughs, spraying equipment, small irrigation pumps and other ancillary farm tools. Tractors and heavy machinery can also be advanced to farmers who have proven performance records. Sponsors sometimes guarantee instalment payments to banks and credit agencies for heavy equipment. Such payments are deducted from the farmer's crop proceeds and, naturally, can be extended over a number of years. Annex 1 presents an example of a sponsor's material and cash advance policies in a project with a high level of material inputs.

Box 13 Growers' Association in Kenya A multipartite project in Kenya, the Mumias Sugar Company (MSC), which was formed by a multinational, the Commonwealth Development Corporation (CDC) and the Kenyan Government, actively promoted a growers' association, which eventually took over the normal administrative responsibilities of a sponsor. The association's board of directors comprised four growers' representatives, three government representatives and one each from the multinational corporation and CDC.36 Following the formation of the Mumias Outgrower Company, the association took over the administration of the project's accounting and farmer-sponsor negotiations and became a forum for complaints, while the MSC retained responsibilities for crop agronomy, transportation and processing.37 Other functions of the association included: representation for association members; provision of credit for cane production; purchase and distribution of farm inputs; arrangement of all financial transactions associated with sugar-cane production; and establishment of provident funds for the contracted growers.

All inputs should be ordered and supplied to the farmer well in advance of sowing or transplanting. The normal administrative procedure is for the administration staff to maintain a statement of account for each farmer, detailing credits of crop purchases and debits for material advances. The normal method of repayment for inputs and other assistance supplied is for the advances to be deducted prior to the final payment. Pricing of inputs and production services can be a sensitive issue and sponsors should charge no more than prevailing commercial prices. Where the sponsor buys inputs in bulk for delivery to farmers, charges made for handling and transport should be clearly explained to the farmers. Charges to the farmers for services such as ploughing and harvesting should not be augmented to cover the inefficiency of management. When available, farmers should have the option to use commercial ploughing services if they are less expensive than those offered by the company. Where outside contractors are used, it is the responsibility of the extension staff to ensure that the work meets the required standards. The normal practice is that management pays the cost of the service to the tractor contractors after the work has been approved and then charges that cost to the farmers' accounts.

In Ghana, cotton companies used to provide "free" inputs to farmers and then offer a relatively low price for seed cotton in order to recover the cost. However, this was found unsatisfactory as, in effect, the more farmers produced the more they paid back, and the companies soon changed to the system of deducting individual farmer advances.³⁸ The idea of paying a low product price to recoup the cost of inputs supplied on credit is not new. It was, for example, widely practised by export crop boards in much of Africa.

Providing logistical support

Another key management function is to organize input distribution, container deliveries (bags, boxes, slings, etc.) and the strict timetabling of transport, especially at harvesting time. This is a vital area for management because logistical problems jeopardize both the sponsor's profitability and the relationship between sponsor and farmer. In the Philippines, for example, the sponsor of a broiler contract experienced problems because the suppliers had, at times, difficulties in ensuring that poultry feed reached the farms on scheduled dates. Farm managers responded by either reducing the quantity of feed, which caused cannibalism among the birds, or buying substitute feeds, which may not have contained the same formulation of ingredients and supplements. There were also problems resulting from the late collection of marketable birds due to poor transport arrangements. In addition, there were allegations of pilferage of live birds and feed by the company's agents.

There can be particular problems where a crop requires processing immediately following harvest. Such crops include tea, sugar cane, tobacco and some vegetables for canning. In Malawi, tea grown by smallholders was rejected because it became over-wilted owing to the failure of the company to provide transport immediately after harvest. The company was obliged to advise farmers of its inability to provide transport at scheduled times, but often this was not done. Although the company was negligent, no compensation was paid. A similar situation has arisen in the sugar industry in Kenya. The sugar company provides transport but it is the responsibility of the farmers to ensure that their sugar cane is delivered within seventy-two hours. Poor logistical support will inevitably sour relations with farmers and reduce the viability of projects.

Purchasing the product

Management must ensure that staff are available to purchase the product from farmers as scheduled. Significant efforts must be made to avoid corruption in the buying process. Farmers must be able to verify the weights of the products they sell to the sponsor. Also, where produce is rejected without the farmer being present there is inevitable suspicion. Under no circumstances should the sponsor dispose of rejected produce without first giving the farmer the opportunity to inspect it. Depending on the circumstances, buying may be carried out at the farmgate, at centralized buying locations or sometimes at the processing plant. Most produce must be purchased shortly after harvest or farm processing so that it is presented in its most favourable condition. When buying is carried out at the processing plant it is often impractical for rejected produce to be sent back to the farmer. However, the extension staff should notify farmers of the reasons why their produce was rejected and offer them the chance to visit the plant to inspect the rejected consignment. Good managers ensure that farmers or their representatives are present when produce is purchased.

MANAGING THE AGRONOMY

In China a large joint venture involving over 23 000 farmers ceased to operate after seven years because of management's failure to organize and direct harvesting and grading practices. It is important, therefore, that managers not only form competent field extension teams, but also plan effective production schedules. During the production season, supervision by extension services of all cultivation activities is essential, particularly to be sure that certain recommended practices are compatible with the farmers' ability to implement them. Significant factors in any venture's performance include:

• field extension services;
• transfer of technology;
• cropping schedules; and
• training and research.

Field extension services

Extension staff employed in contract farming ventures are usually the key link and the direct interface between the sponsor's management and farmers. They require a number of key skills that include:

• A good comprehension of the crop(s) or animals under contract.
• A sensitive and sympathetic understanding of the social customs, language and farming practices of the communities they work with.
• An ability to communicate effectively with farmers and to organize and administer cropping schedules and buying procedures honestly and impartially.

They must also possess an understanding of agronomy, farm management techniques and the potential capabilities of the farmers with whom they work. When selecting extension personnel, consideration should be given to both the personal aptitudes and the formal qualifications of each applicant. In larger projects, senior extension staff and field agronomists should normally be educated to tertiary level. Junior personnel can be recruited from within local farming communities. Although they may lack formal education, they will have the advantage of local knowledge and field staff enlisted from local families can have a beneficial effect on sponsor-farmer relationships. Conversely, as a result of close relationships with immediate and extended families, there is a chance that quota distribution and buying practices can become corrupted.

Annex 6 outlines the varied tasks an extension officer is expected to carry out. Extension staff must first obtain the credibility and trust of the farmers they advise in order to successfully implement the policies of the sponsor. It will then be much easier for them to administer the strict regulatory procedures that are frequently necessary for the maintenance of quality standards and crop uniformity.

The deployment of extension staff may vary considerably. In the Pacific, a company buying maize, tobacco, vegetable crops and export papaya allocated one field officer to every 55 farmers. In a rice project in West Africa, each extension officer supervised 300 farmers, while a joint venture in China provided one technician for every 500 farmers.³⁹ The degree of responsibility of field extension staff depends on the project's structure whereas the extension worker to farmer ratio mainly depends on the type of venture. Sugar cane and cereal crops require a lower ratio. Intensive crops that need constant supervision are cut flowers, vegetables and tobacco. In addition to their job of coordinating farmers, the biggest challenge for extension staff is probably to encourage farmer participation in decision making while maintaining positive sponsor-farmer relationships.

Transfer of technology

Farmers will only accept new techniques if the adaptations result in higher yields and/or improved quality and if the cost of such techniques is more than offset by higher returns. The introduction of technologies can cause cultural adaptation problems for smallholder farmers, even though these technologies are often the most important benefit of the contract. A reported example of this comes from the Central American banana industry. It was found that the potential for gaining acceptance of new technology was greatest with farmers who had little or no prior knowledge of the crop.⁴⁰

Box 14 Management and technology transfer in India Reports of tomato production under contract indicated that both yields and income levels increased because of contract farming. The reasons for the success of the project were identified as follows: Suitable disease-resistant varieties were introduced. Support was provided by local scientific agencies. Good seeding husbandry was practised in the nurseries. Appropriate crop management practices were introduced by the sponsors. Contracts were given in different locations to minimize risk. The staff was responsible for close monitoring of the crop at all stages. Farmers were encouraged to set their own quotas. Oversupply was controlled by specifying the required quantities well in advance of the harvest. Farmers assisted in drafting quality standards. Contracts of "defaulters" were cancelled. Adequate cold storage was available during the off-season to ensure processing throughput.

The new growers had no preconceived ideas on how to grow bananas so they readily accepted the new technology. Managers and agribusiness agronomists should consider the following four basic questions before transferring technology through their extension staff:

1. Intellectual capacity: Do their employees have the ability to transfer appropriate changes?
2. Technical feasibility: Do the farmers have the inclination to accept new techniques?
3. Economic viability: Is the adaptation too costly, complex and risky for the farmer?
4. Cultural acceptability: Does change affect the general farming practices of the farmer?

The process of introducing new technology normally progresses through a number of stages as follows:⁴¹

1. Awareness: This is the stage when the concepts of adaptations are introduced by the sponsors' agronomists to their extension staff. The implications of these adaptations are, in turn, explained to farmers and their representatives.
2. Benefit: It is often necessary to carry out field trials in order to assess the benefits of new technology before it is introduced to farmers. Such trials should either realistically simulate conditions faced by farmers in contracted areas or be carried out by a sample of contracted farmers. Sponsors should not make sizeable investments, nor should they encourage farmers to do so unless there are strong indications that the adaptations will be profitable.
3. Implementation: This involves the extension of the adaptations to farmers through field demonstrations, trial plots and lectures by the technical and extension staff.
4. Appraisal: Appraisals of yields and quality will demonstrate to both farmers and extension officers the value of the adaptation. Such appraisals are particularly important when new varieties are introduced. Farmers who have obtained good results from a particular variety may be reluctant to plant a different one that may yield less but has other important characteristics, such as a high degree of tolerance to disease.

Cropping schedules

Scheduling refers to the timing of specific activities and the sequence in which those activities are carried out. This is important in order to accommodate climatic patterns and to ensure regular and consistent product supply to the sponsor's processing and/or packaging facilities. Efficient scheduling is vital where production by thousands of farmers has to be synchronized for the purposes of irrigation, the achievement of uniform crop quality and the organization of transportation at harvest. Processing capacities can be increased appreciably, for example, by implementing staggered transplanting. This may allow farmers to plant two fields in the same season, perhaps only four weeks apart.

Table 5
A cropping schedule for flue-cured tobacco under contract

Activity	Timing	Remarks
Crop planning	November-December	Management responsibility
Annual farmer registration and forum	December-January	Management-farmers
Field selection	December-January	Management responsibility
Field preparation	February-April	Contract specification 1
Farmer-management pre-crop forum	Early February	Management-farmers
Sowing of seed beds	20 February-31 May	Contract specification 2
Pest and disease control	20 February-31 July	Contract specification 3
Ridging - fertilizer application	1 April-30 April	Contract specification 4
Farmer-management pre-planting forum	Late April	Management-farmers
Transplanting	1 May-10 May	Contract specification 5
Field cultivation and weed control	1 May-31 July	Contract specification 6
Irrigation	When required	Contract specification 7
Farmer-management pre-harvesting forum	Early July	Management-farmers
Harvesting	15 July-10 October	Contract specification 8
Grading and buying	15 July-15 October	Contract specification 9
Field residue control	1 October-15 October	Farmer responsibility
Farmer-management end-of-crop forum	October	Management-farmers

Source: based on Eaton, C.S., 1998b: 127.

Extension staff have the responsibility to schedule the sowing of seed beds, the transplanting of seedlings, and the cultivation and harvesting of the contracted crop within a defined climatic season and in harmony with the farmers' own cropping regimes. At the beginning of each season, management, extension staff and farmers should discuss and confirm all planned activity schedules. Managers should present the sequence and timing of each crop activity to farmers before the first sowings. Table 5 gives an example of a crop schedule of the various activities to be undertaken by farmers and management to ensure that the specifications outlined in the contract are met.

Strict regimes imposed by crop schedules can change the work routines of farmers. This can alter social relations, the gender division of labour and the control and utilization of land and farm resources. Farmers necessarily forfeit some degree of autonomy when they accept exacting timetables and contract specifications, but they do so in expectation of greater economic rewards.

Training and research

Management may consider organizing training programmes for extension staff and farmers in the form of regular lectures and field days as well as through the use of demonstration plots. Staff training can be provided by in-house lecturers and visiting teachers from scientific institutions or through external training courses. Only when the extension officers have gained a comprehensive knowledge of the relevant product(s) and an understanding of their administrative responsibilities are they really in a position to transfer technology to farmers.

There are a number of ways in which the training of farmers can take place. Routine farm inspection visits by extension staff can usually include an element of technology transfer. More formal and regular meetings with farmer groups, conducted by senior extension and research personnel, can be held to concentrate on the relevant activity at the time, e.g. seed sowing, transplanting, fertilizing, pest and disease control or harvesting. There may be a need for up to six such meetings within a single season. When potentially controversial subjects such as grading standards and buying procedures are explained, it is preferable that project managers also attend. Another way to demonstrate innovative farming methods and improved varieties is by having field days in the sponsor's trial plots or in the fields of leading farmers. Management and research staff can give talks and farmers should be encouraged to voice both their positive and negative experiences of new adaptations.

All agricultural crops require some degree of research into issues such as variety behaviour, cultivation practices and rates and methods of pesticide and fertilizer application. If an operation is large enough it can sustain its own research programme. Smaller companies and individual developers must generally rely on either government services or other industry research. In practice, most projects have a limited research agenda, which is mainly focused on seed collection, demonstration plots and teaching.

FARMER-MANAGEMENT RELATIONS

As stressed elsewhere, the development and maintenance of a positive relationship between management and farmers is crucial for the stability of any venture. Adequate incentives, prompt payments, efficient extension services, the provision of timely logistical support and good communication links between management and farmers all play a central role in this process.

The establishment of forums that promote farmer-management dialogue on matters such as contract specifications, agronomic requirements and rectification of misunderstandings and conflict is essential. While almost all contract structures are of necessity hierarchical in nature, farmer participation is essential. Forums offer a channel for experienced farmers to contribute to the structure of contracts and offer advice on local conditions. Managers may also have to address social issues and identify how they can positively contribute to the social and cultural life of the community. This approach cannot be seen as an alternative to effective supervision but as a complementary measure.²⁴ The three most important issues managers must consider are:

• farmer-management forums;
• male-female relationships; and
• participation in community affairs.

Farmer-management forums

Intermediary bodies that link management and farmers for purposes of negotiation and interaction are necessary for all contracts. The absence of communication between farmers and managers can result in misconceptions, misunderstandings and, ultimately, confrontation and conflict. By creating farmer-management forums or similar channels, sponsors can negotiate contracts with farmers either directly or through their representatives.

Organizations that are set up to represent farmers need to be truly representative of the farmers and not simply an extension of management with a few token farmer representatives. For example, problems were experienced in Kenya's sugar industry because the organization supposedly representing the growers, for which the farmers had to pay a levy to cover operational costs, was managed by a board containing only four farmer representatives, whilst there were three representatives from the Government, one from the company and one banker.

Nomination by farmers of at least one representative from each locality provides communication directly between management and the contracted farmers rather than only through field extension staff. Ideally, the representatives should meet with management at least three times in a season. The first meeting should be at the beginning of each season in order to ratify the pricing structure and to discuss the season's crop schedules and any new adaptations that management may want. A second meeting is advisable immediately before harvesting to discuss the crop's progress and to confirm buying procedures. A final meeting to review performance at the end of the harvest may coincide with the final payment to farmers.

In Thailand, a contractual arrangement involving a foreign sponsor highlighted the inexperience of the sponsor. Although the idea of a written contract was new to the area, the sponsor gave little consideration to its details until only a short time before the farmers transplanted their first crops. As a result, the crop was half grown before the contract was distributed. Furthermore, the contract needed four revisions and approval from the sponsor's head office. One unsatisfactory outcome was that the terms of the contract were worded such that farmers' representatives were responsible for the enforcement of the conditions, not the company. In another project in Kenya, farmers apparently did not comprehend or understand the conditions of the contract and expected payments despite the fact that yields did not cover the cost of production support provided.

Both such experiences justify farmer-management dialogue. Furthermore, it is desirable that all farmers attend formal registration meetings at the beginning of each season. Such meetings provide an opportunity to explain management's crop programme, the specifications of the contract and the farmers' obligations under the terms of the contract. Frank public discussions on the formulas of contracts and the clarification of technical specifications are as important as the formal ratification of the agreement itself.

Male-female relationships

Contract farming can be a catalyst for antagonism between men and women, and this can affect both productivity and farmer morale. Contracts in many developing countries are automatically made with male family heads. In China, a large venture with many thousands of farmers had contracts exclusively in the name of the senior male of each family although, in practice, females did the bulk of the work. When the contract nominee does not do the work the actual workers may not receive a just reward for their efforts. In one project there was a steady decline in crop production and a high ratio of voluntary dropouts in a particular district. On investigation it was found that although wives, sisters and daughters carried out the majority of all crop activities, they failed to receive adequate payment from the registered male contractors. In subsequent seasons the females refused to work, a situation that resulted in the abandonment of many contracts. The situation was corrected by a change of policy by the sponsor, who stipulated that the contract be registered in the names of the actual workers. An incensed reaction by the former male contract holders proved short-lived, productivity was restored and farmer-company relationships improved substantially. Eventually several female farmers were elected as grower representatives to the project's forum.

In Kenya, the Tea Development Authority experienced tensions between management and women. The women were not encouraged to establish themselves as independent tea growers, with the Authority's policy being to favour only male household heads. This resulted in the alienation of active working females.⁴³ Such examples reflect poor foresight by sponsors concerning the aspirations of female farmers, as well as a failure to consider the subsistence crop requirements of the contracted farmers and their families. In short, attention should be given to allocating contracts and making payments to the principal workers rather than the household heads. It should be recognized, however, that this might be difficult to implement where traditional customs predominate. The critical factor is not so much who is the registered contractor but how the profits are distributed in relation to contribution and work effort.

Conflict is not restricted only to the use of labour and the distribution of economic returns. Land use and different priorities in relation to subsistence food crops and contracted crops can also be sources of intense household disharmony. In East Africa, the introduction of contracted tobacco conflicted with the cultivation of millet, an important subsistence crop. In another example, contracted rice production clashed with the cultivation of sorghum, a crop traditionally grown by women. An impasse was overcome only after the women successfully negotiated a compromise with their husbands.⁴⁴

Participation in community affairs

The educational, sporting and cultural activities of the farming community are often very important. The involvement of sponsors and their staff in the local community helps to create a positive atmosphere of partnership. Misunderstandings between sponsors and farmers can be at times rectified at social occasions, a natural follow-on from the more formal farmer-management forums.

A privately owned sugar project in Zimbabwe provided sewerage facilities, piped drinking water, a road network, medical and sports facilities, housing and schools to its farmers.⁴⁵ In another venture, charity horse races were jointly organized by management, extension staff and farmer volunteers. Considerable sums were raised and distributed to schools, libraries and health clinics, primarily those within the project's area of operation.

Company policies, based on recognized social and ecological responsibilities, create a positive social environment. Extra-contractual contributions by sponsors to the rural communities in which they operate are not only a positive contribution to the general community but assist in strengthening the system. However, such support must clearly be confined within the boundaries of economic logic, and farming communities should not become dependent on such contributions.

³³ Laramee, P.A., 1975: 48, 56.

³⁴ Daddieh, C.K., 1994: 202-204.

³⁵ Springfellow, R., Lucey, T. and McKone, C., 1996: 28.

³⁶ Glover, D. and Kusterer, K., 1990: 105.

³⁷ Adapted from Goldberg, R. and McGinty, R., eds., 1979: 557-8.

³⁸ Shepherd, A.W. and Farolfi, S., 1999: 33, quoting Coulter, J., Stringfellow, R. and Asante, E.O., 1995.

³⁹ Carney, J.A., 1994: 170.

⁴⁰ Glover, D., 1983: 434.

⁴¹ Adapted from Lionberger, H.E., 1960: 3.

⁴² Springfellow, R., 1996: 23.

⁴³ von Bülow, D. and Sørensen, A. in Little, P.D., 1994: 230.

⁴⁴ Jones, C. in Watts, M.J., 1994: 67; Heald, S. in Watts, M.J., 1994: 68.

⁴⁵ Jackson, J.C. and Cheater, A.P., 1994: 144.