Contract Farming in the Morocco Cereal Sector: Contract Clauses, Ambiguity, and Opportunism

Our main aim was to analyze of the various types of contractual clauses framework of Agricultural Aggregation Projects (AAP) in the cereal sector in Morocco. We used the data from the content of the contracts and by individual interviews with key actors complicated in the process of implementation of the aggregation projects of cereals. The results reveal that only eight Agricultural Aggregation Project, out of 119, received the certificate of aggregation. This is reflecting the fact that, the implementation of this model of vertical coordination was underway. In addition, the analysis of the contract-farming data for clauses has shown us 5 important clauses categories: production (quantity and quality) and payment methods; agricultural extension systems; inputs supply; management of risks; and dispute resolution mechanisms. These findings highlight the value added to the contractual clauses and the need to strengthen the visibility and role of the contract farming as a framework to accompany the investments of ‘‘The Green Morocco Plan’’, in particular with regard to agricultural aggregation projects. We also show that the contract participation reduces the transaction costs in aggregation system, reduction in the number of intermediaries and ensure the link between the producers and markets. The study concludes that, despite enactment of laws on farm aggregation, contract smallholders remain vulnerable to opportunist behavior. It suggests that the contract clauses must be accompanied by commensurate controls and Involving farmers in negotiating contract terms to ensure ‘win-win’ outcomes for Aggregator (AG) and Aggregated (Ag).