1.
Incentive Based Contract
Farming
(IBCF)
Synowden Mbalafana
3rd October 2018
Cotton Farmers Association (COFA)

2.
CHALLENGES FARMERS
FACED BEFORE IBCF
 There were no guaranteed Input suppliers
 Few ginners willing to invest in cotton inputs.
 Some ginners providing incomplete inputs packages, e.g seed
only no chemicals
 No financial institutions willing to finance cotton production.
 Difficulties to access inputs on time
 Expensive inputs on the market
 Poor quality of inputs on the market
 Long distances to access inputs market

3.
BENEFITS OF IBCF
 Guaranteed source of inputs and availablity
 Guaranteed inputs quality
 Labor serving technology (use of herbicides)
 Improved extension services (use of SSPs)
 Improved production and productivity
 Guaranteed seed cotton markets and competitive prices
 Increased income and reduced poverty
 Improved loan repayment record (>85%)

4.
BENEFITS OF IBCF
 Ginners have a pool of trustworthy famers
 Ginners have an assured source of seed cotton suppliers
and guaranteed volume
 Insurances covers in IBCF is a very big incentive and
motivation to both parties
 Increasing interest of more ginners to invest in cotton
(more support for farmers)
 Renewed interest of financial institutions to invest in
cotton production.

5.
BENEFITS OF IBCF
 Farmers are becoming more organized and responsible
(loan repayment and loyalty)
 Increased number of farmers willing to join
 Improved market efficiencies such as reduced, few free
riders, reduced side selling and side buying.
 Improved trust (farmers and ginners)
 Improved trust (farmers and ginners)
 Farmer traceability (use of passbooks)

6.
BENEFICIARIES OF IBCF
 Smallholder farmers (young and old)
 Medium scale farmers
 SSPs
 Ginners
 Input suppliers
 Insurance companies
 Labor market
 COFA and Cotton Council Malawi

7.
IBCF CHALLENGES
 Registration of farmers facing incidences of double
entries and ghost farmers
 No proper software to capture and manage famers
database
 Some farmers still want to beat the system to default on
loan repayment (old habit)
 Few government extension workers
 High cost of fixed assets for ginners
 High cost of inputs e.g hybrid seed
 No proper M&E to track and document progress

8.
AVAILABLE OPPORTUNITIES
 Room to organize more farmers and strengthening their
umbrella institution
 Scaling up the program to cover more famers and areas
country wide
 Room to diversify the project to cover other value chains
in the cotton growing areas e.g sesame
 Invest in training loyal farmers to become para-extension
services providers
 Room to include COFA and Cotton Council of Malawi for
enforcement of regulations

9.
IBCF
THANK YOU VERY MUCH