Unlocking sustainable partnerships: exploring the willingness of oil palm producers to engage in contract farming initiatives

Purpose This study examined the factors influencing oil palm farmers’ decisions to engage in contract farming as well as their extent of participation. Design/methodology/approach The study used cross-sectional data collected from 210 oil palm producers in the western region of Ghana. Descriptive statistics and Cragg’s double hurdle model were the methods of analysis. Findings The results showed that household size, membership of farmer association, farm size, market knowledge and loan availability significantly positively influence farmers’ decisions to engage in contract farming. Also, while membership in farmer associations and market knowledge exerted significant positive influences on the extent to which farmers participated in contract farming, extension contacts and distance to the farm exerted significant negative influences on the extent of farmers’ participation. Practical implications The government, in collaboration with other interested parties, should educate and encourage farmers on the benefits of participating in contract farming arrangements with reputable and well-known institutions that have taken steps to make their services available to farmers. Social implications The study recommends that the government and other contracting firms, like the Golden Star Oil Palm Plantation, should make farm credit a key aspect of their packages, as this will be more attractive to the smallholders. Originality/value The study adds to existing literature by providing contracting companies with helpful information on factors influencing oil palm farmers’ decisions to engage in contract farming. Peer review The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2024-0284