Achieving Sustainable Development Goals in the global food sector: A systematic literature review to examine small farmers engagement in contract farming
This study (PDF) in the Business Strategy and Development Journal aims to identify the factors that drive smallholder participation in contract farming. Contract farming is touted as a triple‐win proposition: 1) it helps food sector companies economically by providing them access to valuable land resources; 2) it helps small landowners in generating stable income by providing them access to mainstream markets and; 3) it helps mitigate some of the negative environmental impacts of agriculture production. Contract farming is a common strategy among multinational companies in the global food sector. However, it largely depends on whether or not small farmers can participate in contract farming programs, which has been a major issue globally. In cases where smallholders dominate the agrarian context, there is evidence of smallholder participation in contract farming. When the agrarian context contains both large and poor smallholders, the latter remain excluded from participating in contract programs. In addition, the review finds that smallholders with more assets and formal land tenures are likely to participate in contract farming. The results point to a two‐pronged strategy for improving smallholder participation in contract farming programs. First, for poor farmers already in contract farming, the patterns of smallholder integration in contract farming need to be examined to understand when smallholder participation in contract farming leads to decreased poverty levels and increased societal benefits. Second, there is a need to examine when asset endowment is important for smallholder participation in contract farming. Therefore the need for more comprehensive methodologies to examine small farmer participation in contract farming is suggested. Overall, a better understanding of how changes in the design of contract farming can incentivize or disincentive smallholders from participating in contract farming is timely. In the meantime, the global food sector companies must consider these factors as they develop plans toward achieving SDGs.