Factors associated with the sustainability of contract farming among sorghum farmers in Tharaka Nithi county, kenya

Abstract

Contract farming has gained prominence as a strategy to enhance agricultural productivity and improve farmers' livelihoods in Tharaka Nithi County, Kenya. There has been an increasing demand for sorghum in the county, especially from malting companies such as East African Breweries Limited (EABL). The EABL has been contracting farmers in the last decade in the county to produce the crop to meet its sorghum needs. Despite the potential benefits of contract farming, such as access to a reliable market and provision of advisory services regarding appropriate production techniques, high-quality seeds, and fertilizer, the system's sustainability is uncertain due to the numerous challenges the farmers have been experiencing. These challenges are most likely associated with factors such as farmer and farm characteristics, farming systems, and the kind of contractual arrangements between farmers and buyers. Understanding these factors is crucial to develop effective interventions and policies that can promote the long-term viability of contract farming. Additionally, there is little empirical evidence relating to the sustainability of sorghum contract farming since most of the previous studies have focused on the impact and performance of the contractual agreements. Therefore, this study aimed to establish the factors associated with the sustainability of contract farming among sorghum farmers in Tharaka Nithi County, Kenya. The study employed a correlational research design. The population of the study comprised 17,000 contracted farmers from the county. A sample of 375 contracted sorghum farmers selected using cluster sampling was engaged in the research. A semi-structured questionnaire was used to collect primary data regarding farm and farmer characteristics, farming systems, contact terms for sorghum production, and sustainability of contract farming. A pilot study was carried out in Mitunguu ward in South Imenti constituency, Meru County involving 38 contracted sorghum farmers to check the reliability of the research instrument. University supervisors, peers, and experts in the field of agribusiness were invited to check the validity of the questionnaire. A Cronbach alpha coefficient (α) was used to estimate the reliability of research instrument items. The pilot data reliability coefficients for the various variables were as follows: farmers' characteristics (α = 0.76), farm characteristics (α = 0.74), farming systems (α = 0.76), contract terms (α = 0.84), and sustainability of contract farming (α = 0.72). Data was analyzed using Statistical Package for Social Sciences (SPSS Version. 29) and Stata Version 15. Descriptive statistics and inferential statistics were employed in data analysis. A multiple linear regression model was used to determine the relationship between farmers’ and farm characteristics versus the sustainability of contract farming. The findings revealed that only household size (p < 0.05) among the farmers’ characteristics of the study significantly contributed to the sustainability of contract farming. Land ownership (p < 0.05) and land location (p < 0.05) were the farm characteristics that significantly contributed to the sustainability of contract farming. Pearson's correlation was utilized to examine the relationship between contract terms, farming systems, and the sustainability of contract farming. The study's results indicated a weak correlation (r = 0.27) between the farming system and the sustainability of contract farming, while a strong correlation (r = 0.75) was observed between contract terms and the sustainability of contract farming. The study recommends that contracting firms focus on farmers with larger households, higher education, substantial off-farm income, and extensive sorghum experience. Additionally, firms should assist in land acquisition, provide transportation for remote farmers, develop comprehensive training programs, and formalize contracts with fair terms and clear specifications. These strategies aim to enhance the long-term viability of contract farming arrangements and address the challenges identified in the study.