Why do small-scale producers choose to produce under contract? Lessons from nontraditional vegetable exports from Zimbabwe

This article explores the motivations behind the decision of small-scale producers to grow nontraditional vegetables under contract for export. Based on a survey of small-scale producers in Zimbabwe, four factors are identified as motivating contracting, namely, market uncertainty, indirect benefits (e.g., knowledge acquisition), income benefits, and intangible benefits. Respondents are clustered according to the relative importance of these factors in their contracting decision. Four clusters are identified and related to the characteristics of these fanners including size of the farm, amount of land devoted to export crops, access to alternative markets, and the proportion of family income derived from export crops. The results suggest that there are systematic differences between farmers in their decisions to contract which needs to be recognized in contract design and management. (c) 2005 Elsevier Ltd. All rights reserved.