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The aim of this study was to examine the impact of contract farming to the cotton production; the case study of Bunda. Specifically, the study aimed to identify if contract farming is an effective agricultural finance model which enhances the small scale cotton farmers, to identify if contract farming effectively improves market access for the small scale cotton farmers, and to identify the challenges facing contract farming in Tanzania for the small scale cotton farmers.
Simple random and purposive sampling techniques were used to select respondents from the population of Bunda district. The data (both primary and secondary) were coded and analyzed by using a special program known as Statistical Package for Social Science (SPSS)version 16 and Microsoft Excel 2007.
The findings revealed that the contract farming is by far the most suitable Cotton farming project that can make a cotton production to be successful on contract. Contract farming is the application of agreement based on famers and buyers over the supply of cotton farming inputs by the buyers and the famers to sale the product to the buyer company as the contract reveals. The contract farming on cotton farming play a vital role in increasing the production ,the growth of the income and profit to cotton farmers.
Based in the research findings the study recommends that Government, Policy makers, Cotton Board, and the Ginning companies dealing with buying seed cotton from farmers are advised to develop farming projects to launch contract farming inorder to increase acreage production of seed cotton farms.. Emphasis should be on creating contract farming awareness to promote favorable conditions and improve profit to small scale famers. The promotion should be interesting to ginning companies that show the interest. Governments have sometimes fallen victim to dubious or "fly-by-night" companies who have seen the opportunity for a quick profit. Therefore, the Government should try to convince Ginning companies Buyers) through their Association(TCA) and other Tanzania Cotton stakeholders on
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