Contract farming: Bringing farmers and buyers together
The Samoa Chamber of Commerce and Industry Inc and the FAO are joining forces to promote contract farming as a means to coordinate links between farmers and agribusiness firms.
In simple terms, contract farming is an agreement which establishes conditions between a buyer and farmers for the production and marketing of a farm product or products.
Under contract farming, producers typically commit to the future delivery of farm products to a buyer under agreed specifications that can include prices, production technologies, quality characteristics and production delivery dates, among other mutually agreed conditions.
In theory, the agreement should be mutually beneficial to a buyers and farmers. It should promote agricultural production and guarantee a secure market for the products, thereby allowing farmers to earn increased revenue and buyers to obtain a return on their investments.
To raise awareness of contract farming and to promote its adoption in Samoa, FAO and the Samoa Chamber of Commerce and Industry Inc offered the first training workshop on planning and implementing contract farming operations in Apia.
Farm leaders, agribusiness executives, government officials, NGOs and development practitioners participated in the event.
The workshop was facilitated by FAO Senior Agribusiness Economist, Carlos da Silva. “Contract farming is one of the proven mechanisms that can be promoted to improve efficiency and inclusiveness in transforming food and agriculture systems. There are many examples of contract farming schemes in the Pacific region in areas such as flowers, oil palm, broilers, vanilla, coconut and tobacco. FAO is advocating for responsible contract farming globally through our technical expertise” said Mr da Silva.
Contract farming is not a recent innovation - it has been used throughout the world for decades. Interest in contracts to coordinate production and sales in agrifood chains has grown significantly in recent years. However, contract farming is not yet as developed in Samoa or other Pacific Island countries as it is in other parts of the world.
Samoa Chamber of Commerce and Industry President, Tuala Pat Leota remarked“FAO aims to enhance public-private sector collaboration in addressing the challenges faced by smaller and disadvantaged participants in food and agricultural systems. The chamber sees this as an opportunity to build on and continue the success of its Coconut Clusters project which saw effective capacity building reach right down to the community level”.
“The Samoa Chamber of Commerce, as the national private sector organisation of Samoa looks forward to continue our partnership with FAO to enhance more opportunities for the private sector of Samoa”.