The term 'outgrower scheme' is often reserved for schemes where agri-business has considerable control over the smallholder production process, providing a large number of services, such as input credits, tillage, spraying and harvesting. The smallholder provides land and labour in return for this comprehensive extension/input package. The high-value horticultural export sector is currently the focus of considerable outgrower scheme development (for example, Hortico in Zimbabwe and Homegrown in Kenya).

European supermarkets are the main market for horticultural exports from sub-Saharan Africa. Quality requirements are exacting in terms of physical appearance and food safety, which in turn requires highly developed technical and managerial production skills. In addition, supermarkets need to be able to trace produce back to the grower. Together, this implies a close working relationship between the farmer and the exporter, and a sophisticated system for providing agricultural services. In these schemes, the high cost of the service provided by the company involved is justified by the high value of the final product.

Hortico in Zimbabwe operates an outgrower scheme producing and exporting babycorn and mange-tout beans to the European market. Success has been achieved by establishing a thorough supervisory system and rigid enforcement of standards. By early 1999, 3000 smallholders were contracted to sell their produce to Hortico at a price guaranteed at the beginning of the crop cycle; 60% of participating farmers are women. The amount grown by each farmer is restricted. This ensures that production of other crops is not neglected, whilst adequate attention is devoted to the export crop. Training, technical support, inputs and spraying are provided by the company, and farmers provide labour, land and irrigation (using watering cans). Contact between the company and the farmer is frequent - a lorry visits each farmer every second day. This reduces the possibility of side-selling. Cost recovery on inputs is nearly 100%.

Analysis

The close monitoring of farm operations, high level of technical support, and frequent contact with the smallholders, ensured successful operation of this outgrower scheme.

There may be scope for increased use of producer groups to reduce costs of the schemes and allow some of the services provided by the company to be assumed by the group. Such schemes allow smallholders to participate in high-value export sector development, producing specific products to exacting standards, whilst export companies find that the labour-intensive nature of some of the crops is ideally suited to small unit operations.