Contract Farming in Mozambique: Implications for Gender Inequalities Within and Across Rural Households

• DOI: http://doi.org/10.1111/saje.12222
• Author: Cecilia Navarra
• Published date: 01 June 2019
• Date: 01 June 2019

South African Journal of Economics Vol. 87:2 June 2019

doi : 10.1111/ saje .122 22

228

© 2019 UNU-WIDER. South A frican Journa l of Economics published by John W iley & Sons Ltd on behal f of

Economic Societ y of South Africa.

CONTRACT FARMING IN MOZAMBIQUE: IMPLICATIONS

FOR GENDER INEQUALITIES WITHIN AND ACROSS

RURAL HOUSEHOLDS‡

CECILIA NAVARRA†,*

Abstract

This paper analyses the implications of contract farming for gender inequalities in rural Mozambique.

Contract farming is often considered one of the major tools of agribusiness development. It

broadly includes those arrangements under which producers commit to providing cash crop to

a buyer firm. This paper exploits a panel dataset (2002–2005) collected by the Mozambican

Ministry of Agriculture among a nationally representative sample of rural households to explore

contracts’ implications for gender equality both across and within households. We look at both the

participation of female-headed households in contracts and the impact of establishing a contract on

a set of intra-household women empowerment indicators. Concerning the first, our results confirm

a (small though significant) effect of selection out of contracts of households where a woman is the

household’s head. With regard to the second, we expect contrasting effects to be at work: on the one

hand, increased income may relax budget constraints improving women’s living conditions, and on

the other, we may expect a shift in favour of men of the control over the household’s assets. We find

different results according to the indicator used; after controlling for selection bias, we find no effect

on control over land but a negative effect on women’s access to extension services.

JEL Classification: O13, J16, C21, C23

Keywords: Contra ct farming, gender inequalities, women e mpowerment, Mozambique, propensity

score matching

1. INTRODUCTION

This paper focuses on gender inequalities in access to markets and control of resources

for agrarian production in rura l Mozambique. For this purpose, we analyse contract

farming arrangements, with respect to both gender-based inequalities in accessing them

and to their impact on women’s empowerment.

* Corresponding author: Europe an Parliamentary Research S ervice, Square de Meeus 8, 1000

Brussels. E-mail: cecilia.navarra@gmail.com

† European Parliamenta ry Research Service

‡The author writes in her personal c apacity. The content of the paper is the sole responsibility

of the author and any opinions expresse d herein should not be taken to represent an of ficial

position of the European Parlia ment.

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike License, which permits

use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and the content is offered

under identical terms.

South African Journal

of Economics

229South African Journal of Economics Vol. 87:2 June 2019

© 2019 UNU-WIDER. South A frican Journa l of Economics published by John W iley & Sons Ltd on behal f of

Economic Societ y of South Africa.

Contract farming is a form of vertica l integration between agricultural producers and

buyers (Oya, 2012). It comprises a range of contracts, whereby producers commit to

supply cash crops to a buyer firm. They usua lly include timing and pricing arrangements

and often set quality standards too (Smalley, 2013). According to the type of contract,

firms may provide inputs and technica l assistance to the producers.1

In the last 10 years, these arra ngements have been considered a way in which agribusi-

ness systems could benefit smallholders (World Bank, 2007). The Mozambican Plano

Estratégico Para o Desenvolvimento do Sector Agrário (PEDSA) (RoM, 2011) considers

them to be tools for market integration, allowing for a switch from subsistence produc-

tion to commercial farming. Moreover, both Mozambican and international policy doc-

uments identify the potential for women empowerment in contract farming agreements.

The PEDSA (RoM, 2011) makes reference to the Gender Strategy of the Agricultural

Sector (2005), which has the strategic objective of “establishing partnersh ips between the

public and private sectors to increase investment in support to small farmers and women

in particular, sharing the costs and risks of assistance in adopting new technologies and

new cash crops through programs aimed at food security and poverty reduction” (RoM

2005: 20).

Addressing gender-based inequalities in rural Mozambique is particularly relevant

since there is abundant evidence that rural women play an important role in production

but have little control over resources (Morgado and Salvucci, 2016; Arndt et al, 2011).

This work attempts to address the issue from both intra-household and between-house-

hold perspectives. Concerning the latter, we adopt a consolidated approach; i.e. we

compare female-headed households and male-headed households. There is a significant

proportion of households headed by women in rural Mozambique (about 27% in 2005),

but this share may have increased in the last decade (Morgado and Salvucci, 2016).

We perform analysis to determine whether there is a systematic difference in access to

contracts between female- and male-headed households. With reference to intra-house-

hold dynamics, the impact of being in a contract farming arrangement is analysed with

respect to a number of indicators that capture women’s access to assets for production

and agraria n services. Methodologically, the main issue to address in order to analyse t he

consequences of being in such agreements, is the effect of selection into contracts. We

cannot claim that e vidence of a correlation indicates a causal effect because it is plausible

that households that enter into contracts could differ significantly from households that

do not.

Section 2 identifies the potential mechanisms through a brief literature review on

contract farming and gender relations in ru ral households. Section 3 provides some back-

ground on rural Mozambique, describes the data used and presents descriptive statistics.

Sections 4 and 5 develop the two main subjects of analysis in the paper: gender inequal-

ities across households in terms of access to contract farming and gender inequalities

within households, i.e. the impact of entering into contract farming on measures of

women control over resources for agriculture. Section 6 discusse s the results, and Section 7

concludes.

1 Prowse (2012) underlines moreover that the contractual arrangement is non-transferable and

gives the buying f irm exclusive right on the crop.