The Status and Challenges of Contract Farming Engagement in Gimbo District, Kafa Zone, South West Ethiopia People’s Region, Ethiopia

Abstract

Contract farming has long been used in industrialized nations' agricultural production systems as a system of institutions to help smallholder farmers commercialize their farms in an effort to increase revenue and reduce poverty. This study aimed to assess the state of contract farming and challenges of engagement in Gimbo District, Kafa Zone, South West Ethiopia People’s Region, Ethiopia. A focus group discussion, observations, key informant interviews with fifteen experts and authorities, and surveys of 361 farm households were used to collect data. The study revealed that the productivity of coffee improved from 3-4 qt/ha to the average productivity of about 10 qt/ha and the price of coffee improved from 7 birr/kg to 19 birr/kg. This suggests a considerable increase in production and price improvement resulting from the adoption of contract farming. According to the study, the local community benefited from 345 temporary and 44 permanent jobs that were established by contract farming operations in the study area. According to the report, external variables posed challenges to contract farming initiatives in the research area. These external factors included lacking of a legislative instrument that serves as a guide, the lack of infrastructure, the inadequate assistance of governmental organizations, and the failure to integrate the necessary stakeholders to support the sectors. Thus, the study recommended that the government should focus on raising awareness, enhancing extension services and organizational setup, ensuring transparency and accountability in the contract process, and improving financial services.