Criticisms of contract farming. Criticisms of contract farming often focus on the unequal power relationship between a partnering company and farmers, the latter providing a form of cheap labour and the former passing over production risks to small-scale producers. Senanayake (2011: 9) states that contract farming may reduce farmers bargaining power, depending upon the markets structures created by companies in the form of cartels. However, according to Xxxxxxxxxx (2011: 9), the lack of bargaining power by farmers is not insurmountable, as they can get together and establish contract bargaining co-operatives to counteract the buying power of large food retail corporations. In addition to the above, the following shortcomings of contract farming have also been identified: • Inequity According to Prowse (2012: 34), FRCs frequently fail to include basic details in contracts, so that farmers are frequently not fully informed about the nature of the agreement they are entering into. Xxxxxxxxxx (2011: 9) has argued that contract farming generally involves some form of monopsony in which a single buyer deals with a multitude of relatively unorganised farmers. • Overspecialization and unsustainable export-orientated agricultural practices Contract farming, according to ActionAid (2015: 10), is generally associated with the production of commercial crops for export, mono-cropping and forms of production that rely heavily on chemical fertilizers and pesticides, often with adverse repercussions for human health and for the soil. Minot (2007: 1) raises a critical point that contract farming cannot serve as a broad-based strategy for rural development because it only makes economic sense for certain commodities in certain markets. The author further contends that contract farming is usually deemed to be viable for high-value crops bought by large buyers for processing or export, such as tea, tobacco, cotton, and other commodities such as seed, dairy, poultry, rubber and oil palm. It is often deemed non-viable for staple grains, roots and tubers and pulses for local consumption. According to ActionAid (2015: 8) participation in highly specialised supply chains does not often benefit the most vulnerable, because it is capital intensive, and is often at the expense of local needs, such as food security and local markets. • Undermining gender equality
