2SCALE/Contract Farming in Africa

Despite the increasing demand for food in both developed and developing counties, smallholder farmers are not able to integrate to local markets because of low capital, limited access to credit, and risk aversion. Value added processes have emerged as a means to alleviate the constraints faced by smallholder farmers in order to enhance their productive capacity. Towards Sustainable Clusters in Agribusiness through Learning in Entrepreneurship (2SCALE) is an agribusiness project in Africa that aims to connect farmers, buyers, and intermediaries. The agribusiness cluster approach is designed to help rural smallholders move from subsistence farming to farming as a business and supply agricultural products for local, national, regional, and international markets. 2SCALE is funded by the Ministry of Foreign Affairs of the Netherlands and is implemented by the International Fertilizer Development Center, the Base of the Pyramid Innovation Center, and the International Centre for Development Oriented Research in Agriculture.

AIR is evaluating the impact of 2SCALE, focusing especially on farm income, and food and nutrition security benefits for participating farmers. Impact evaluation studies will be carried out in five countries: Kenya, Uganda, Ghana, Benin, and Mali to determine to what extent observed benefits can be attributed to program interventions. To answer the research questions, AIR is implementing a longitudinal, quasi-experimental evaluation with repeated measures at the farm-household level. We are using data and local knowledge from the lead companies in each country to identify a reasonable counterfactual and collect baseline and follow-up data in treatment and comparison farm households. Our researchers will use a difference-in-difference approach, combined with statistical matching, to estimate program impacts for treatment and comparison groups. Baseline data were collected in 2015 for 4,000 households (800 from each of the five countries) covering intermediate outcome indicators such as knowledge and changes in agricultural practices, as well as on longer term outcomes such as impacts on total farm income, yields, gross margins, crop selection, and food security. Endline data will be collected in 2017.