How Incentive-Based Contract Farming increased the quality and quantity of Kilombero rice
The biggest threat to contract farming schemes is side selling, whereby farmers grow a crop with crop inputs (on credit) and technical help from one buyer, but sell the crop to a competing buyer. At the core of the Incentive Based Contract Farming (IBCF) approach is that farmers have a structural incentive to fulfil their contracts through being offered an increasing package of inputs and incentives in subsequent seasons, if they supply the quality and quantity contracted to the IBCF buyer in the current season for which they have received crop inputs on credit.
PROSPER Markets seeks to extend the IBCF approach to buyers in PROSPER’s target districts and to demonstrate it with different crops and in different situations. IBCF requires tailored design to a particular crop and situation, but also requires an adaptive approach to respond to unanticipated and emerging issues.
This brief by Jason Agar and the PROSPER Markets team describes how Kaporo Smallholder Farmers Association (KASFA) has used the IBCF approach to work with smallholder farmers to increase yields of Kilombero rice, a distinct aromatic rice preferred by Malawians.