CONTRACT FARMING PRACTICES AND ECONOMIC SUSTAINABILITY IN PYRETHRUM FARMING

Abstract

Contract farming is increasingly promoted as a means to enhance agricultural productivity and improve farmers’ livelihoods, particularly for small and medium-scale producers. However, the extent to which existing contract farming practices influence the economic sustainability of pyrethrum farming remains underexplored in Tanzania. This study investigates how contractual arrangements affect the sustainability of pyrethrum farming with a focus on key practices of contract farming. A cross-sectional survey design was employed, targeting 179 randomly selected small- and medium-scale farmers engaged in contract farming. Data were collected using structured questionnaires and analysed through descriptive statistics, regression models, and ANOVA to evaluate the relationship between contract farming practices and economic sustainability. The findings reveal that stable pricing (95.0%), access to extension services (98.9%), and assured market access (99.4%) significantly contribute to economic sustainability, followed by other factors such as stable pricing, extension services, equity in contracts, and technology adoption with B = 12.79, p < 0.001, B = 14.699, p < 0.001, B = 10.505, p < 0.001, B = 8.859, p < 0.001 and R² of 0.858. These results underscore the importance of inclusive and supportive contract structure arrangements in enhancing farmers' economic growth; hence, it assures the contract farming system's sustainability.