Impact of contract farming on household income of smallholder farmers: the case of organic honey production in South West Ethiopia, Sheka Zone

Summary

In Ethiopia, honey production is a traditional occupation widely practised by farmers as a complementary enterprise. Immense, diverse botanical resources and suitable climatic conditions make the country favourable for beekeeping. However, an inefficient agricultural marketing system together with traditional production systems hinders smallholder farmers to benefit optimally from honey supply. In an attempt to address these problems, contract farming has been introduced in organic honey production since 2007 in Ethiopia. However, honey production via contracts is still very limited with only a small number of farmers engaged in it. This study is, therefore, initiated with the aims of (i) assessing the impact of contractual honey production on smallholders’ household income, and (ii) analysing the major factors affecting smallholder farmers income from contractual honey production in the Sheka zone, Ethiopia. In addition, the study examines structure and functioning of contract farming as it is practiced in the study area.