Systemic constriants of Contract farming in Ethiopia
Conference
10th International Conference on Agricultural Statistics
Format: CPS Abstract - ICAS 2026
Keywords: constraints, ethiopia
Abstract
This research examines the systemic constraints that influence the success of contract farming in northwestern Ethiopia, as indicated by farmers’ overall satisfaction and profitability. Despite the current nutritional significance and economic advantages of soybeans for farmers, as well as substantial government initiatives to expand market integration and promote sustainable production through contract farming, the current soybean yields consistently fall short of their potential, and local sources struggle to meet growing demand. This determined paradox marked by robust market need yet plagued by low productivity, insufficient market linkages, and low farmgate prices pressures profound, interconnected systemic encounters within the soybean contract farming business. Traditional studies usually use a reductionist method, investigating isolated factors and thus failing to explore the multifaceted interdependent nature of these farming encounters. To address the gap in knowledge and methodology, this research uses an inclusive, multilevel analytical method, combining a Power dynamics theoretical framework. Through employing a mixed approach that combines both econometric techniques and qualitative descriptions. The research finding, the bivariate Tobit model result, confirms that key drivers of farmer satisfaction include transparency, favorable contractual prices, and timely payment terms. However, poor seed quality depressingly influences farmers’ overall contract farming satisfaction. For profitability, weak contract enforceability and limited market access highly decrease farmers’ profits, which highlights the need for fair agreements and better farmer protection systems by incorporating strong collateral terms.