1. Negotiating Contract Farming in the Dominican Republic By: Laura T. Raynolds

2. Contract Farming  Contract Farming: the commitment of land and labor resources to the production of a commodity that is ultimately controlled by an agro industrial firm.  Over the past 20 years agriculture in the Dominican Republic, like other regions of Latin America and the Caribbean, has been fundamentally restructured by processes of globalization, international debt, and neoliberalism

3. Nontraditional Agriculture  Structural adjustment policies imposed by the world bank and IMF as prerequisites for debt renegotiation have stimulated non traditional production by channeling resources towards new private sector initiatives.  Non traditional agricultural firms were granted tax exemptions, low interest loans, and other subsidies, permitting this sector to flourish while much of the Dominican Economy was in shambles.

4. Tomato Production in the Dominican Republic  Processing Firms provide growers with technical assistance, mechanical services, chemical and other inputs, and a guaranteed market  Contracted farmers supply land and labor.  Why Contract? Contracting is seen as the only way to gain access to sufficient irrigated acreage, since large blocks of improved land are scarce and Dominican law limits large landownership  Tomatoes are a labor intensive crop, under contract responsibility for assembling labor and assuring work performance is shifted from the firms to the growers

5. The Decision for Farmers  “How else would I work this land?”  Growers do not have the money to purchase seeds or other inputs, and most have no source of credit except to informal money lenders with interest rates  No “force” to produce and market without a contract  The firms control the documents,the companies get the growers to sign a lot of contracts that most growers admit they can’t read

6. Contracting in the Face of Production Losses  Distribution of risks and the role of debt help the firms to minimize potential losses and keep the growers committed to production  “The farmers are poorly paid workers on their own land in the service of the agro industrial companies.”  Seeing as the agroindustrial companies didn’t own the land they had no incentive to maintain it. Indiscriminate use of pesticides led to massive whitefly infestation that spread to other cash crops and subsistence crops  Growers experienced huge losses and debt that kept them tied to the agroindustrial firms

7. Conclusions  Contract farming is complex and growing throughout Latin America and the Caribbean  In the recent period of economic decline producers are forced to rely on agroindustrial contracting to acquire credit to cover production and consumption needs and to ensure markets for their crops  Landholders need to carefully analyze power asymmetries that may affect the distribution of benefits and risks over time