Outgrowers and Livelihoods: The Case of Magobbo Smallholder Block Farming in Mazabuka District in Zambia

Outgrower schemes are increasingly seen as a way to empower smallholders economically, while addressing their production constraints. This article examines an outgrower sugar cane scheme in Zambia officially launched in 2008 with substantial grant funding from the European Union. In this case, the outgrowers are not involved in the production, but pass their land in a block to be managed by a company. This acts as an extension of the nucleus estate, with dividends paid according to a collective contract. The scheme, and associated grant funding, has proved highly beneficial for Zambia Sugar Plc, owned by South African multinational Illovo Sugar (which became wholly owned by Associated British Foods in June 2016). The new outgrowers are increasingly differentiated: some are former dryland farmers, whereas others are outsiders from nearby towns. Some have benefited significantly, with opportunities for accumulation. Others have not, as dividends have been shared by an increasing number of family members. Intra-household distribution of sugar income has exposed gender differences, as it is mostly men who are the designated shareholders. Moreover, the new wealth flowing from the scheme has provoked political contestation within the community, as some seek to exert control over the scheme. Thus, the sugar block scheme has radically changed agrarian relations in the area. There are higher incomes for some – and a seeming success of the outgrower model – but this comes at a cost, as land, livelihoods and social relations are reconfigured.


Introduction
In recent years, contract farming and outgrower schemes have received renewed attention, prompted by concerns about the negative impacts of large-scale land acquisitions through purchases or leases by largely foreign agribusinesses. Outgrower schemes, often used interchangeably with the term contract farming, can be defined as 'a contractual arrangement for a fixed term between a farmer and a firm, agreed verbally or in writing before production begins, which provides resources to the farmer and/or specifies one or more conditions of production, in addition to one or more marketing conditions, for agricultural production on land owned or controlled by the farmer, which is non-transferable and gives the firm, not the farmer, exclusive rights and legal title to the crop." 1 These schemes are often presented as a route through which smallholder farmers can engage with agribusiness and commercial agriculture, 2 The grant also covered the costs of land preparation, roads, and irrigation infrastructure. 11 €1.5 million of funding (to be repaid over a period of 40 years) came from a commercial bank loan, and is held by ZSC. This was used for the construction of a new main canal that brought water to the Magobbo scheme, as well as eight other large-scale commercial sugar growers. In addition, €500,000 was allocated to the Mazabuka Sugar Cane Growers Trust (MSCGT), and was used to compensate smallholders who were to relocate to give way for a contiguous block of land for growing sugar.
This paper is based on qualitative interviews conducted between June and September 2013 and in July 2015, as well as a quantitative household survey carried out in September 2014. The qualitative element draws on seven focus group discussions, eight in-depth interviews with key informants and life histories with six households, as well as interviews with ZSC and Nanga Farms officials, district agricultural officers and district council officials, and a detailed review of documents relating to the scheme. The survey included a random sample of 100 outgrower and non-outgrower households in communities within a five-kilometre radius of the outgrower block farm, representing 424 individuals.

Smallholder Outgrower Schemes in Zambia
In Zambia, government development objectives have prioritised the commercialisation of the smallholder sector through outgrower schemes as a way to integrate poor farmers in rural areas into the national economy. 12 The Zambian government is considering scaling up the nucleus estate/smallholder outgrower model in its 'farm block' programme to be implemented in each of the country's provinces. 13 Both contract farming and 'block' farming have a long history in Zambia. Contract farming dates back to the 1960s and 70s under the United National Independence Party (UNIP) government's parastatal companies. The Lint Company of Zambia (LINTCO) 14 and the National Marketing Board (NAMBOARD) provided small-scale farmers with extension, credit and market outlets for cotton and maize respectively. The block farming concept dates back to the colonial era when land consolidation and investment in infrastructure was used to promote commercial agriculture, often linked to 'settlement schemes'. 15 In Zambia, block schemes were originally designated for European settlement, 16 such as the Mkushi Farm Block for white settlers established in 1947, and were promoted by the postcolonial UNIP government. This was a large-scale block farming model involving mainly commercial farmers with no smallholder relationship. More recently, there has been a drive to link smallholders with large-scale capitalist agricultural 'estates', largely through private-sector-managed outgrower schemes. 17 The current government-led farm block development initiative involves the acquisition of blocks of land in customary management areas of not less than 100,000 ha per block in the country's ten provinces, with basic infrastructure provided by government to entice investors. 18 The farm block relationship with the small-scale farmers will be in the form of an outgrower scheme in which the small-scale farmers will grow the same crop as the foreign-operated core venture.
In 2004, between 35 and 40 per cent of Zambia's nearly one million smallholders were participating in outgrower scheme arrangements. 19 Cotton, tobacco and paprika are nearly 100 per cent produced through a smallholder contract farming system, 20 while for sugar cane an estimated ten per cent is grown through smallholder contract outgrower schemes. 21 Sugar cane has always played a central role in smallholder contract farming in postcolonial Zambia since 1981, when the UNIP government established the first-ever nucleus estate/smallholder outgrower scheme under the Kaleya Smallholder Company Limited (KASCOL) in Mazabuka District, southern Zambia, as a joint project with the Commonwealth Development Corporation (CDC). 22 The smallholder outgrower scheme under KASCOL currently has 160 participating smallholders whose sugar cane is supplied to ZSC. The Zambian government has been supportive of the development of outgrower schemes in the sugar sector through the various investment incentives extended to the ZSC.

Sugar and the Zambian Economy
Sugar production in the country commenced in 1960 at a refinery in Ndola town owned by Tate and Lyle in Copperbelt Province. The refinery was supplied with raw sugar from Chirundu Sugar Estates in Southern Rhodesia (now Zimbabwe). Tate and Lyle eventually established the ZSC in 1965 and the Nakambala Sugar Estates in Mazabuka District in 1966, two years after the country's independence. In its quest to increase the state's stake in the national economy, the Zambian government nationalised ZSC in 1973. Against the backdrop of neoliberal economic reforms that the country underwent in the 1990s, ZSC was sold back to the original owner -Tate and Lyle -and the CDC in 1995. In 2001, Illovo Sugar of South Africa bought ZSC from Tate and Lyle. 23 In 2006, Associated British Foods (ABF) acquired a majority shareholding in Illovo, and since June 2016 has acquired full ownership. 24 Key drivers of the growth in the Zambian sugar sector are its contribution to the economy through increased foreign exchange earnings, growth of the Gross Domestic Product (GDP), economic diversification from copper mining, wage-employment creation and rural development. The sugar sector contributes around six per cent (US$45 million) 25 of the country's foreign exchange earnings, 26 second only to the copper industry. 27 Sugar also contributes about four per cent of the country's GDP and, in a country with a very high unemployment rate, the industry is hailed as a major direct formal wage-employment generator, offering around 11,000 jobs, with total dependants probably exceeding 75,000. 28 In 2012, Zambia was ranked one of the world's lowest-cost producers of sugar, at less than US$400 per tonne, 29 together with Malawi, Tanzania, Zimbabwe, Sudan, Ethiopia, Cambodia, Swaziland and Mozambique and Laos. 30 Apart from being one of the lowest-cost producers in the world, sugar cane yields in Zambia are among the highest, above 100 tonnes per hectare, due to the use of extensive irrigation technology. Thus, sugar is central to Zambia's political economy -essential for state revenues, and core to the mission to attract foreign investment into the agricultural sector. Sugar cane remains the main crop produced in the country in terms of volume and value, and production has increased by at least 94 per cent between 1999 and 2009, 31 largely on account of ZSC's expansion programmes. Zambia is self-sufficient in sugar, as the country produces more than double what it consumes. 32 The domestic market is insulated from imports by a government policy decision that: requires that all refined sugar sold on the Zambian market be fortified with vitamin D; levies a 23.8 per cent tariff on sugar imports from outside Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC) countries; and imposes restrictive import procedures. 33 For sugar companies operating across the region, Zambia is attractive given the strong state support, and the low-cost, high-efficiency production system. ZSC remains the dominant company, contributing about 90 per cent of the total national sugar production with less than ten per cent coming from two other companies, namely Kafue Sugar based in Kafue District in Lusaka Province and Kalungwishi Sugar in Kasama District in Northern Province. 34 ZSC's dominance in the sugar industry in the country means it can exercise monopsony control in the sugar market. The company produces ten per cent of Illovo Group's sugar output, but contributes 30 per cent of the Group's profits. Indeed, as Dubb notes, ZSC stands out as a 'profit powerhouse' among the Illovo Group's six southern African country operations, owing to its high efficiency in cane production and the largest single-mill processing capacity at 450,000 tonnes per annum. 35 Illovo in turn makes good use of Zambia's profit repatriation policy that allows an investor to repatriate all profits after tax obligations are met.
Within the sugar economy, ZSC is highly significant, and is well placed to exert significant influence in political circles due to its economic contributions. Following the acquisition of the company by Illovo, the Zambian government offered investment incentives by signing an Investment Promotion and Protection Agreement with related incentives such as importation of equipment duty-free, access to finance at concessionary rates and reduced corporate tax. 36 Furthermore, the growth of the sugar subsector in Zambia has for many years been stimulated by the European Union/African, Caribbean and Pacific (EU/ACP) Sugar Protocol under the EU's Sugar Common Market Organisation (CMO), which allowed the export of a quota of sugar to the EU market at a guaranteed minimum price. The EU CMO in the sugar subsector was, however, reformed in 2006. Among other measures, the reform entailed a 36 per cent reduction in the EU guaranteed minimum price, reflected in the price obtained by ACP Sugar Protocol countries over a four-year period beginning in 2006-07. The Sugar Protocol, thus, ended in 2009-10, and these changes necessitated an adaptation of the sugar sector to new market conditions with a lower EU sugar price. 37 The European Commission, therefore, proposed the Accompanying Measures for Sugar Protocol (AMSP) scheme to help the affected countries that were dependent on the EU market. The EU's new sugar regime allowed competitive ACP sugar producers to expand their sugar exports, quota-free and duty-free, to the EU market.
The AMSP support to Zambia was focused on expansion of sugar production by promoting smallholder outgrower schemes in Mazabuka District supplying cane to ZSC. The company has benefited greatly from these quota-free, duty-free sugar exports to the EU, and support for its expansion programme. In 2015 ZSC began moving away from the EU and targeting the regional market. Table 1, comparing two marketing seasons, illustrates this point. While the EU market has been quite significant for Zambia Sugar's growth, exports to the EU have recently fallen by 30 per cent due to low prices for sugar now offered by the EU member states. 38

Magobbo Smallholder Outgrower Scheme Design
Consultations for the establishment of the Magobbo sugar scheme commenced in 2005 between a group from the Magobbo community and ZSC, when the former put in a request to ZSC. 39 41 It has become popular in the sugar sector in southern and eastern Africa as a way of expanding land area for estates, as well as accessing water. By involving landholders as shareholders in the scheme, the social objectives of supporting smallholders can be met, and donor funds accessed to support infrastructural development and expansion of sugar production.
In 2008 participating smallholders in Magobbo agreed to register their individual plots of land into a single block title to be held by the Magobbo Cane Growers Trust (MCGT, or Magobbo Trust). Farmer inclusion in the scheme was based on ownership of land in the area adjacent to the ZSC nucleus estates in which the company was interested. In this outgrower arrangement, smallholders play no role at all in farm management, as their land is leased to the management service provider under a management contract. The outgrowers act as shareholders receiving dividends from profits made from their plots. The company argues that the block farming arrangement makes it possible to invest in capital equipment; undertake joint services such as levelling of land and provision of irrigation canals; purchase bulk supply of fertiliser and chemicals; and organise labour, harvesting and haulage. The rationale presented by ZSC, and supported by the EU, was that this was the way to assure economic viability through productivity and efficiency, and so maximise returns. Based on business and management thinking from large estates, its features largely ignore the role of smallholders, and push a particular construction  of 'viability' to the exclusion of others. 42 The block arrangement therefore effectively extends the nucleus estate and a form of centralised management. Major parties to the outgrower arrangement are ZSC, which operates its own nucleus estate and a sugar mill; the MSCGT; the smallholder shareholder-outgrowers organised as the MCGT; and Nanga Farms, the management service provider. Other parties include the Magobbo Settlement Committee, overseeing settlement matters, and Mazabuka Municipal Council, responsible for land reallocation and registration of land offers. ZSC undertook to purchase, process and market all the sugar produced from the smallholder block farm through a cane supply agreement. In addition, ZSC pays registered smallholders monthly dividends from proceeds of sugar sales. The MSCGT was established by ZSC in 2005 to facilitate the development of smallholder outgrowers in Mazabuka District, to negotiate the development of the scheme. The Magobbo Trust (MCGT) is a local membership organisation in which all participating smallholders are registered; it represents farming and business interests of farmers in the scheme. The Magobbo Trust signed a five-year renewable management services agreement in 2011 43 with Nanga Farms to undertake all aspects of cane farming operations. The management services agreement runs for five years and is renewable by mutual consent between the parties. All services provided by the management service provider are deducted from the sugar cane revenues derived from the block farm.

Outgrowing and Local Livelihoods
Given this context, the overriding questions are how this outgrowing arrangement affects local livelihoods; who benefits from this land use and ownership configuration; and what conflicts emerge as a result. Zambia Sugar claims that a contracting arrangement with a company, as part of a block farming arrangement, is a win-win deal. Yet there are questions raised, as the scheme fundamentally transforms the relationships between people and the land, introduces a very new stream of income, and affects both community and intra-household relations. In so doing, the scheme reconfigures the agrarian economy, with major implications. In the following sections, I will examine these, asking who wins and who loses from the block farming outgrower scheme. Livelihoods are multi-dimensional and complex, 44 and to get a full appreciation of impacts and outcomes we have to explore issues concerning access to land and water for outgrowing, earnings for outgrowers, and benefits such as employment to the rest of the communities within Magobbo and the surrounding areas.

Access to Land and Water
Access to irrigation water by the Magobbo scheme is governed by a water agreement with ZSC. Water rights have been granted to the scheme by the Water Board of the Department of Water Affairs through ZSC. Irrigation water is drawn from the Kafue river via a main canal, stored in overnight holding dams and gravity-fed irrigation furrows take water to the cane fields. 45 Irrigation water is strictly for sugar cane growing and water use is closely monitored by ZSC to ensure no other crops are grown. Thus, the control of irrigation water by ZSC gives the company control over what crops outgrowers can cultivate, and, in the case of an alternative market for sugar cane developing in the area, side-selling would be forestalled, as water supply to the outgrower block farm could easily be cut off. In 2006, before the implementation of the scheme, the Magobbo community had approximately 1,800 ha of land, with about 73 households and a total population of approximately 900 people, including extended family dependants. 48 Smallholder households held between 4 and 32 ha of land each and were engaged in dryland farming that was severely constrained by lack of rainfall and limited access to production technology, inputs, credit, markets and opportunities for wealth creation. 49 Since the block farming required the consolidation of individual plots into a larger block, displacement and relocation of households became inevitable. Thus, between December 2009 and the second quarter of 2010, 64 households were relocated and resettled in newly designated residential compounds adjoining the block farm. In addition, internal transfer of land among households within the settlement took place, through exchange and/or selling of land in excess of six ha, the maximum required for each participating smallholder. 50 This process of land transfer was not exclusively confined to residents in Magobbo. During the initial process of reorganising the plots in order to grow sugar cane, those with connections or finance were able to gain access, others hedged their bets by holding land inside and outside the scheme, while others were excluded completely. ZSC and Nanga Farms acknowledge that some people who were not real farmers from Magobbo bought land, as they had prior information about the outgrower sugar project. 51 Access to land in the block thus became highly contested at the time when the scheme was established. While the rhetoric of the company and donors focused on a 'smallholder community', the divisions that emerged early on affected this picture of apparent harmony. With newcomers and elites gaining access to the scheme, it is far from the ideal of a 'community' initiative, and has acted to divide people, individualising property rights and disrupting community cohesion.  With the commencement of preparatory scheme activities in 2007, however, the likely number of participating households increased from 73 52 to 80 in the interim evaluation of 2011, 53 then to 94, 54 a figure that is still being quoted in many official documents. A grower distribution list for the 2014-15 farming season, however, indicates total beneficiaries numbering 101, including 99 registered individual persons and two trusts (see Table 2).
Furthermore, while four and six ha were the original lower and upper limits set by the scheme promoters for the smallholder households in the scheme, in practice many family members of the originally registered smallholders began to lay claims to the land and the new income generated from sugar cane. This brought further disharmony, threatening the smooth operation of the scheme. The authorities in the different governance structures of the scheme thus agreed to register some members of the same families, enabling them to lay a claim on income from specific registered plots in their own right. This led to fragmentation of plots and bloating of the number of individual participants, as noted above.
At a wider community level, there have been a number of further sources of discontent. Some objected to the whole scheme, and it was noted in the feasibility study that at least nine members of the Magobbo community were opposed to the development. 55 They argued that this was land they had occupied for several decades and contained much-respected graves that were being taken over by the company. Just as in previous eras, this was seen as land encroachment in an area that already had limited agricultural land. There were initial incidents of physical disruption to the land demarcation process by some members of the community. 56 Others objected to swapping parcels of land, as they felt that some influential persons from the nearby Mazabuka town would gain advantage during the land reallocation process, allowing local elites to grab land, and would enable others from outside to be inserted into the scheme. Some influential families rejected the requirement to let go of their land through swapping and were allowed to subdivide within their families and register differently. This was a situation acknowledged by both ZSC and Nanga Farms, but they chose not to do anything about it, as they did not want to become embroiled in the land issue. 57 This defeated the scheme's objective of equity 58 in terms of spreading benefits to the wider local community, as some families were over-represented in the scheme at the expense of others. This has resulted in the breaking down of cohesive community bonds, and a separation of those benefiting from the scheme and those not.
During the initial negotiations for the scheme between 2006 and 2007, some people were reluctant to enter into the agreement because they were committed to traditional dryland agriculture and livestock keeping. Some livestock keepers were reliant on common grazing land that was to disappear in the scheme plans. Major divisions emerged in this area in the early years of the scheme, resulting in significant conflicts which still linger to date. Smallholders participating as outgrowers in the scheme are largely male, marginalising women, whose participation has increased only after they have inherited plots in the scheme after the death of a husband or father. At the time of this research, there were only 15 women registered as smallholders with land ownership in the scheme. The low levels of female ownership of land in Magobbo area, and thus participation in the scheme, can be explained by the historical land ownership between men and women in settlement schemes in Zambia. Lubombo Settlement, in which Magobbo community and the outgrower sugar scheme is situated, only had two women owning farmland in their own right out of a total of 65 landowners in the early 1990s. 59 Initiators of the scheme did not make an effort to alter the existing inequalities in landholding in such a way as to increase female participation. However, although legislation relating to land acquisition and allocation is gender-neutral in Zambia, few women still apply for, or are allocated, agricultural land. This is due to factors such as administrative practices of those charged with the responsibility to allocate land, attitudes, existing cultural norms and socioeconomic challenges. 60

Earnings of Outgrowers
The income paid to smallholders is in relation to tonnage of cane supplied to the ZSC mill for each particular month, as well as the quantity of sucrose (a crystalline found in sugar cane extracted as ordinary sugar) obtained from the harvested sugar cane. The sucrose price is determined by the Estimated Recoverable Crystal (ERC) Committee, a local arrangement with representation of major stakeholders in Mazabuka District including ZSC, commercial outgrowers, and the Magobbo smallholder outgrowers through the MCGT. 61 Price per tonne varies depending on the levels of sucrose in the harvested cane. Outgrowers receive 59.1 per cent of net divisible proceeds, with the rest going to ZSC, 62 a pricing mechanism the Executive Committee of the Magobbo Trust considers fair and transparent, as they are represented on the ERC Committee. After deductions for loan repayments, management fees and withholding tax, the balance is distributed to each smallholder according to the number of hectares each holds in the scheme. The positive income impact on participating households in the Magobbo scheme has been clear.
According to an evaluation report on the scheme, outgrowers' annual incomes from agriculture would increase from a low of €480 from cultivating dryland subsistence crops during the period prior to commencement of cultivation of sugar cane 63 to €9,000 after the scheme reaches full operation from growing sugar cane, based on an average five ha under sugar cane. This estimate of income should, however, be treated with caution, as the harvests of the first two years or so do not reflect the harvesting schedule over the eight-or ten-year production cycle. 64 Survey data nonetheless show a more realistic picture of the incomes realised by outgrowers. Respondents were asked to state how much income their household received from the leasing of their land to sugar cane outgrowing in the last season. Average income realised from division of proceeds in 2012-2013 for those households that participated in the sugar cane outgrower arrangements was US$2,999. This is a considerable sum when compared with average incomes in surrounding rural areas, which ranged between US$400 and US$600 per year. 65 Thus, for the relatively few who are involved, dividends are on average currently good, resulting in the possibilities of accumulation.
In the focus group discussions and household family histories with both men and women, including both smallholders involved and those not involved in the outgrower scheme, participants were unanimous about the income benefits. They observed that increased incomes received from participating in the scheme enabled smallholders to build good houses made of permanent materials such as bricks and iron sheets, buy motor vehicles, farms and livestock, construct houses in town and improve the family diet. Yet such opportunities for accumulation and for improving livelihoods and food security are not realised by everyone, as the distribution of these gains is uneven, both between and especially within households. Sugar dividends tend to be captured by men, while women are usually charged with the production of food crops for home consumption on dryland farms if these are retained.
Interviews in focus groups and other key informants cautioned that the incomes from sugar cane varied highly over months, growing seasons and among participating smallholders, depending on the number of hectares held in the scheme. As Table 1 shows, at least 28 out of 101 beneficiary participants, accounting for 28 per cent in the outgrower scheme, had plot sizes of 3 ha and below, less than the 4 to 6 ha initially recommended for the scheme. A good number of households received very low dividends and had to seek other livelihoods options. In one focus group, participants commented: 'The money is not enough to invest in any business'. 66 However, according to Nanga Farms, the equitable distribution of income and its variability over months and seasons is a complex matter that is not easy for some smallholders to understand, and the expertise to ensure that it was adequately explained was lacking within the Magobbo Trust. 67 Interviews with scheme participants further revealed that they often had little experience handling relatively large amounts of money, with inflows varying over the year. This sort of financial planning, ownership of a bank account and balancing of income and expenditure patterns was very different to that experienced in a dryland farming setting. Many admitted that, despite the relatively large sums received by some, money was often wasted by men, and not invested in household needs and accumulation opportunities due to inequalities in financial control at the household level. They were wary of 'moral decay' resulting from the wealth from sugar proceeds. 68 This was not universal, however. Some managed to save money, and focus expenditures, resulting in some form of accumulation. At the time of this research, sugar incomes had only been received for three growing seasons, but contrasts between those involved in the scheme and those who were not in terms of expenditure items and a number of asset indicators was striking. For example, Table 3 shows that 20 per cent of households in the sample involved in outgrowing sugar cane owned a truck and/or car, compared with 1.7 per cent of households not involved. Close to three quarters (73.3 per cent) of those receiving dividends from sugar plots owned a television set, compared to about 50 per cent of those not involved in the scheme. Some of the differences in asset ownership can be explained by the fact that rural elites and town dwellers had forced their way into the scheme when it was set up, but the majority of residents, who had previously been as poor as those who were not involved in the scheme, were able to accumulate, even over this short period.
In order to assess the patterns of household expenditure by outgrower households, survey respondents were asked to rank the five most important items on which they spent income from sugar cane. The top five expenditures of those involved in the scheme in rank order were  food, education, house improvements, health, and farming inputs. Spending money on housebuilding improvements was a top priority for many, given that they had to relocate from previous homesteads to make way for the establishment of the scheme block farm. Increased incomes from sugar outgrowing have not been a good story for all. For some, divisions between household members have become a source of tension. With sugar incomes being paid into an individual bank account, this gives particular power to the account holder. In most cases this was the male head of household, in whose name the leased land was registered. The individualisation of income through the sugar dividend has resulted in a breaking down of the extended family system and patterns of mutual support. Sugar income has also attracted extended family relatives -even those who had emigrated elsewhere -to lay a claim, as the outgrower arrangement involves no on-farm production by the landowner. So proceeds from sugar income are perceived as 'rental income' 69 which must be shared, putting further pressure on the household income, and thus compromising the potential for some households to accumulate. One male outgrower commented: Due to perceived profitability of growing cane, when I swapped with somebody to start growing cane, the children of my elder brother came to confiscate the papers and are the ones who get the money. The land belonged to my elder brother. 70 A recent study on gender implications of contract farming in Magobbo community documented similar instances of income or farm plots being taken by other relatives. 71 Both ZSC and Nanga Farms acknowledged these challenges, but were of the view that they would not want to become embroiled in these social matters and preferred to let the families affected resolve them, 72 or let the Mazabuka Municipal Council handle such matters. 73 Similarly, the Magobbo Trust expressed the view that the executive committee would not like to impose on families, and that the families needed to resolve any intra-family conflict themselves. 74 Again, the Magobbo scheme benefits a very small fraction of the overall population of the area. Due to expensive capital outlays for large-scale operations and irrigation technology to access bulk water, there are limited possibilities for replication to the wider population in the district, and, therefore, the majority of the population must continue to rely on the dryland farming that presents very low income-earning possibilities.

Employment: Benefits to People who are not Outgrowers
Apart from the direct income benefit of smallholder incorporation that outgrower schemes engender, wage-employment opportunities are often cited as other benefits. The presence of the Magobbo block scheme -and the ZSC's nucleus estate more broadly -has provided employment opportunities for those in the community. For the Magobbo community living next to the estate, and even a block farm notionally 'owned' by some of them, has mixed results.
Wage labour in rural areas is usually crucial to rural livelihoods, especially in the presence of dryland farming prone to variable weather conditions, as in Magobbo area. Therefore, wage work can contribute to livelihood sustainability for rural residents. Survey data show that in a sample of 424 household members aged ten years and above in Magobbo community surrounding the outgrower block farm, 18 per cent were employed on either a permanent or a casual basis, much higher than the corresponding employment participation of ten per cent in Mazabuka Constituency in which the block farm is located (as captured by the nationally representative Rural Agricultural Livelihoods Survey [RALS] of 2012). 75 Eight per cent of household members above the age of ten in the sample were employed in the outgrower block farm. The importance of this employment generated by the outgrower block should not be underestimated, particularly for the younger generation who are progressively becoming dispossessed from new economic opportunities, as a result of commercial pressures on land to grow sugar cane.
Labour opportunities in the Magobbo scheme farm block and the company estate are seasonal, and are largely short-term contracts of six months. The Corporate Citizenship report published in 2014 showed that a total of 6, 014 people were employed on the ZSC nucleus estate, including its subsidiary Nanga Farms, in 2013. 76 Nanga Farms directs some of the labour to work on the Magobbo scheme block farm. Of this direct employment, only 1,954 (32 per cent) are permanent staff, with the rest (4,060, or 68 per cent) being seasonal. Most of the seasonal labour is migrant, involving gangs of male cane-cutters coming from Kalabo District, in Western Province. 77 The exact numbers employed on the scheme block farm are not clear, as figures are subsumed within those of Nanga Farms. In the scheme block farm, a deliberate policy to employ at least one member from each outgrower household was adopted by Nanga Farms. The interviews undertaken in this study indicated, however, that most participating households send youthful male members, thus disadvantaging young women. Interviews with community members indicated that women did not benefit from employment opportunities at the same level as men on the farm block, with most women getting only highly seasonal and casual jobs such as weeding, disease control and planting, while men dominate irrigation, cane-cutting, fertiliser application, field supervision and truck driving, with wage rates similarly skewed. The low levels of women's participation in employment are underlined by the excerpt from a focus group discussion below: At first, they were taking one person from each household for employment; now and this year they are not doing that; in 2011-2012 there were 30 people taken. Only three were women of the 30 working there. This year they say only one person has been taken. They say there is corruption this year. 78 ZSC claims to recruit for the outgrower block farm as much as possible from the Magobbo area, but not all families have benefited from this employment, as the recruitment process is based on an applicant having the right physical characteristics for the job and the necessary discipline. An industry official bemoaned the poor work culture of some employees from Magobbo area, with some frequently absenting themselves from work. 79 The survey data show gender differentiation in average wages between men and women employed to work in the outgrower block farm. Men in permanent employment earned on average US$43 per week, compared to the US$31 earned on average by their female counterparts for the same period. Women find job opportunities in less-skilled and lower-paid types of work. Benefits of employment have thus been unevenly spread, and this gendered division of labour limits women's opportunities.

Conclusion
The ZSC, informed by the experience of its parent company Illovo elsewhere, adopted a block farming arrangement of sugar cane with Magobbo smallholder farmers, whereby outgrowers are not involved in the production, but pass over their land to be managed as a block. This is managed effectively as an extension of the nucleus estate, with dividends paid according to a collective contract.
How successful has this arrangement been for the different stakeholders? For ZSC, it has been massively beneficial, as the company has been able to expand land under cultivation, gain access to water resources and attract investment aid funding from the EU, as well as gain tax breaks from the Zambian state, all on the back of a claimed commitment to poverty reduction and pro-poor agriculture. Given the high sugar cane yields achieved owing to the ideal agronomic and climatic conditions for cane production in Mazabuka District, the low costs of production enjoyed by ZSC, as well as the leverage the company commands through its web of self-created institutions in the scheme arrangement, mean that corporate profits are assured and high.
In Zambia, sugar cane is treated as a strategic sector, with the state always taking a close interest. State support to foreign investment in the sugar subsector derives from the desire of the state to maximise both foreign exchange through exports and other revenues through corporate taxes, as well as maximising employment creation. Furthermore, sugar production through the promotion of schemes that incorporate smallholder outgrowers is in line with the state's objective of supporting development and ensuring national self-sufficiency in an important commodity. 80 For those living in the area, the consequences have been more mixed. The Magobbo scheme involves a very limited number of households compared to the overall population of the area, who are still reliant on unreliable dryland farming. Access to sugar land is also highly contested, and there are a number of outsiders who have found their way into the scheme, further excluding locals. For some who are involved, dividends are good, resulting in the possibilities of accumulation. Yet, the distribution of these gains is uneven, both between and within households. Sugar dividends tend to be captured by men, and increasingly an elite, often not connected to the local area, who have, through a range of means, gained access to the sugar land. Furthermore, extended family members demanding that sugar wealth be shared are likely to put further pressure on household income. 81 While the rise in incomes from sugar is acknowledged by many, if spread too thinly sugar income may only allow for simple reproduction, 82 thus not leading to accumulation for investment.
Contemporary expansion of sugar cane cultivation is radically changing the agrarian structure in Mazabuka District, whereby some households have now been incorporated into sugar production as shareholders. The surrendering of individual claims to land as part of block farming means that the households have become only nominal owners. The relationship between land and livelihoods is recast by the contracting arrangement, and intra-household and cross-community tensions are heightened. By constructing landowners as shareholders receiving individualised dividends, the social relations of production and reproduction have been challenged within and across households. The sugar block scheme thus has radical consequences: higher incomes for some -and a seeming success of the outgrower modelbut this comes at a cost, as land, livelihoods and social relations are reconfigured.