Abstract
South Africa is characterised by a highly unequal farming sector, an apartheid `legacy' which excluded black farmers from resources, market-oriented agriculture, and main input and output markets. In that context, restructuring agriculture appears to be a condition of socio-political stabilisation. From the early 1990s onwards, the end of apartheid resulted in significant changes regarding the country's production environment: withdrawal of the state, economic deregulation and market liberalisation. The latter is becoming increasingly consumer-driven and vertically integrated (Weatherspoon & Reardon 2003; Sautier et al. 2006). In this context, contract agriculture' is regarded as instrumental in integrating (black) smallholders into the mainstream agricultural economy, in overcoming the duality of the agricultural sector, and in alleviating poverty (Sartorius 2004). This paper contributes to the debate on how contract agriculture could contribute to this objective in South Africa. It focuses on whether or not contracts can successfully help black smallholders to improve market access, and to develop viable farming businesses. The paper is based on insights from the citrus sector, an industry characterised by significant restructuring and the recent emergence of contract farming opportunities for smallholders. A first section will present an overview of the implications of South Africa's macro-economic restructuring and transformation in the citrus sector. The second section will analyse the effectiveness of contract farming and discuss the factors that affect the likelihood of the establishment and sustainability of these contracts for smallholders in South Africa. Related to the latter, conclusions and recommendations are presented in the third section.