Evaluating The Effectiveness Of Out-Grower Projects In Reducing Poverty In Rural Zambia: A Case Of The Eastern Province

In 1991, the Zambian economy was liberalized and the agricultural sector was not spared. The out-growerprivate sector interest in outgrowing grew and has been on an increase ever since.In 1991, rural poverty stood at 88 percent and 46.8 percent for urban poverty respectively. The Living Conditions Monitoring Survey (LCMS) conducted in 2015 revealed that rural poverty stood at 76.6 percent and 23.4 percent for urban poverty respectively. To this effect, rural poverty still remains high and predominantly a rural phenomenon. This study, therefore, sought to evaluate the effectiveness of the out-grower schemes on reducing poverty and answer the general research question on how effective were the out-grower schemes in reducing poverty in rural Zambia.  

Pragmatism is the philosophical view that underpins the study and it applies to the mixed research method approach for this study. The convergent parallel strategy of the mixed research method approach was used. The target population was 50,000 smallholder farmers and a questionnaire with open ended questions (qualitative) and closed questions (quantitative) was administered to a sample size of 396 smallholders farmers, broken down as 196 out-grower farmers that were selected from the out-grower firms’ registers and 200 independent farmers that were selected from the village registers. The registers were used as the sampling frame. Simple random sampling was used to select smallholder farmers. An interview guide was used for 20 key informants that were chosen through purposive sampling method. A total of 416 respondents participated in this study. Qualitative data was analyzed by using the inductive process of building from the data to broad themes and then to a generalized model or theory. Quantitative data was analysed by using the Chi-square tests to ascertain association between critical variables measured by categories of out-grower farmers and independent farmers. The T-tests compared the treatment and control groups on variables of interest. The coefficient of variation (CV) was used to gauge the level of respondents’ disagreement (dissention) in responses while coefficient of consensus (CC) was used to gauge the level of respondents’ agreement (consensus) in responses, applied to the Likert scale and any other ordinal responses. 

The findings from the study revealed that the out-grower schemes implementation has contributed to a positive change in poverty reduction to smallholder farmers participating in the out-grower scheme. Further, out-grower farmers have improved their knowledge in understanding the operation of the out-grower scheme. Subsequently, the out-grower schemes have benefited the communities. In this regard, the study concluded that the out-grower schemes have been effective in reducing poverty in the rural areas of Zambia. The study recommended that there was need to address the issue of power imbalance between the out-grower farmers and the out-grower firms. The out-grower firm has more power in terms of controlling out-grower schemes arrangements. Further, the high illiteracy levels among the rural farmers require that all documents, including contracts should be translated in the local language for ease of understanding. Subsequently, both the out-grower farmers and out-grower firms must adhere to their contractual obligations for the purpose of transparency and honesty. Finally, the out-grower farmers should be working towards an exit strategy of self-reliance to avoid perpetual dependence on the out-grower scheme on long-term.