Smallholder Sugarcane Farmers’ Participation and Profitability of Factory Contracted Services in Malava Sub-County, Kenya

Abstract

This study evaluated the effect of participation in factory contracted services on the profitability of smallholder sugarcane farmers inMalava Sub-county in Western Kenya. Primary data were collected using structured questionnaire from a sample of 384 farmers usingsystematic random sampling and proportionate sampling. Analysis of variance was applied to determine if there was a significant difference between profitability of contracted and non-contracted farmers. The effect of contracted services on profitability among contract farmers was analyzed by multiple linear regression. The results showed that contracted extension, labour and credit services had significant effect on farmers’ gross margins. The Kenyan government should formulate policies that enhance provision of contracted extension, labour and credit services. The need for a review of the existing contract engagement terms among sugarcane farmers is also evident in this study. Keywords: smallholder farms, sugarcane, contracted services, gross margins