Contract farming and public−private partnerships in aquaculture
This paper (PDF) from the FAO explores some aspects of contract farming with public–private partnerships that combine the expertise and profitability goals of the private sector with the enabling policies of governments. Contract farming (CF) has demonstrated its positive impact as an institutional innovation. Even smallholders can benefit: by reducing – if not eliminating –transaction costs, CF provides markets, finance and technology to smallholders. They can be competitive when there are diseconomies of scale in cultivation, but benefits from economies of scale in processing. Partnering with private companies or NGOs can provide time and resources for entrepreneurial attitudes to evolve and for projects to become financially viable. Sustainability requires that farmers and private partners benefit economically and that environmental and social conditions do not worsen. For projects that focus on food production there are societal benefits. These benefits accrue to society when young people are involved in the project. The extent of unemployment and underemployment of young people in rural sub-Saharan Africa is a personal and societal tragedy, so training and opportunities to engage in business activities is positive. A further societal benefit is the reduction of food insecurity thanks to a successful project. In the first place higher incomes and profits from entrepreneurial activities enhance purchasing power and thus food accessibility. In the second place it increases the availability of food. These benefits are particularly pertinent when a project expands the production of eggs, fish and poultry, given the micronutrients they provide.