Online Reporter
Word From The Market
Tina Nleya
AGRICULTURE remains the backbone of Zimbabwe’s economy, not only as a source of food, but also as a critical driver of industrial development, employment creation and export earnings.
As the country intensifies efforts to strengthen its agricultural value chains, one model stands out as a cornerstone for aligning farmer productivity with industrial demand: contract farming.
Recent policy developments, particularly the promulgation of Statutory Instrument (SI) 87 of 2025, under the Agricultural Marketing Authority Act, have further underscored the importance of structured marketing and contractual arrangements between farmers and industry.
The Government has effectively placed the responsibility on local farmers and processors to build sustainable partnerships that secure national food security and support industrial growth.
Understanding contract farming
Contract farming is essentially an agreement between a farmer and a buyer where the former pledges to produce a specified crop or commodity, and the latter commits to purchasing it under predetermined terms.
These contracts are entered into before the start of the farming season, giving both parties predictability and security.
Typically, such contracts are registered with and overseen by the Agricultural Marketing Authority (AMA).
This ensures that they are legally recognised, enforceable and designed in a way that benefits both farmers and industry.
In practice, contract farming involves not only purchase guarantees, but also support to farmers in the form of inputs, credit, extension services and access to technology.
By integrating farmers into well-structured supply chains, contract farming minimises uncertainty.
Farmers no longer have to gamble on volatile spot markets or be subjected to predatory middlemen, while industry players gain consistency in supply and quality assurance.
Why contract farming is a win-win model
Benefits for farmers
Guaranteed markets: Farmers are assured of a buyer at the end of the season, reducing the risk of losses due to lack of market access.
Stable pricing: Contractual arrangements typically include agreed-upon prices, shielding farmers from extreme price fluctuations.
Access to inputs: Many contractors provide seed, fertiliser, agrochemicals and technical advice to improve productivity.
Reduced marketing costs: Farmers avoid high transportation and storage costs since the contractor often collects produce.
Benefits for industry
Supply security: Millers, processors and other buyers can plan their operations around reliable and consistent supply.
Quality assurance: Farmers under contract are guided to follow agreed agronomic standards, leading to better-quality raw materials.
Cost efficiency: By securing produce locally, processors reduce foreign currency expenditures and import costs.
Value chain development: Contract farming ensures that local industries are integrated with farming communities, fostering inclusive growth.
This model demonstrates why contract farming is not just a tool for farmer empowerment, but also a strategic instrument for industrial competitiveness.
SI 87 of 2025: The policy context
The Government’s decision to issue SI 87 of 2025 was a bold and necessary step to stimulate local production and strengthen Zimbabwe’s food systems.
Key provisions of the instrument include:
Local sourcing obligations: With effect from April 1, 2026, all processors must source at least 40 percent of their annual requirements locally. From April 1, 2028, processors will be required to source 100 percent of their requirements locally.
Fair pricing framework: The instrument also introduces concepts such as import parity price and production parity price to ensure that local farmers are compensated while maintaining competitiveness with international markets.
The underlying rationale is clear: Zimbabwe can no longer afford to rely on imports to feed its population and sustain its industries.
Instead, resources must be channelled into building resilient local value chains that empower farmers and ensure processors have dependable access to raw materials.
AMA’s role in driving structured marketing
AMA is central to this entire framework.
As the statutory body mandated to regulate, promote and coordinate agricultural marketing, AMA’s role in contract farming is multifaceted:
Registration and oversight of contracts
AMA ensures that all contract farming arrangements are duly registered. This protects farmers from unfair contractual terms, while also safeguarding industry investments. By acting as a regulator and referee, AMA brings transparency and trust into the system.
Market linkages
The authority serves as a bridge between farmers and industry, creating platforms where producers can access buyers and processors can identify reliable suppliers.
Policy enforcement
With SI 87 of 2025 now in effect, AMA is tasked with ensuring compliance, particularly with the local sourcing requirements. This means monitoring processors and holding them accountable for meeting the minimum sourcing thresholds.
Capacity building
AMA works with farmers to ensure they have the technical knowledge, business skills and resources to meet contractual obligations. This enhances productivity and reduces default risks.
Safeguarding quality and standards
By enforcing grading and quality standards, AMA helps ensure that Zimbabwean agricultural products meet both local and international market requirements. Through these roles, AMA is not just a regulator, but also a facilitator of partnerships, ensuring that both farmers and industry grow together.
Conclusion
Contract farming is more than a business arrangement; it is a strategic partnership that binds together the future of Zimbabwe’s farmers and industries.
With SI 87 of 2025 creating a strong policy framework and AMA providing oversight and facilitation, the model promises a future where farmers have guaranteed markets, industries have reliable supplies and the nation enjoys food security and industrial growth.
As Zimbabwe works towards sourcing 100 percent of its grain and oilseed needs locally by 2028, contract farming stands out as the bedrock upon which this vision will be realised.
Tina Nleya is AMA’s marketing and public relations manager. She can be contacted on email: [email protected]. Word From The Market is a column produced by AMA to promote market-driven production.
