Onyango, J. P.Waswa, F.Mwamburi, M.2013-12-192013-12-192012-04Journal of Applied Biosciences 52: 3685– 36951997–5902http://ir-library.ku.ac.ke/handle/123456789/8177This paper reports on one of the findings of a study to establish the relationship between contract sugarcane farming, poverty and environmental management in the Lake Victoria basin. Methodology:A social survey design was adopted. Primary data were collected using questionnaires from 37, 40 and 40 household heads representing sugarcane farmers from Lurambi, Koyonzo and Chemelil respectively. Data on farmer incomes were obtained from individual farmer payment statements. Descriptive statistics focusing on frequency distributions and step-wise backward regression were used to derive income models as platforms for future decision-making in sugarcane agri-business. Results: Results from Lurambi, Koyonzo and Chemelil showed that on average farmers retained only 32, 31 and 34% respectively of the gross income from contract sugarcane farming. Although net income was influenced differently by conventional input costs, yield appears to be a key determinant of gross income across the sites. Net income was significantly depressed by company-driven deductions for which farmers had no control. Such skewed sharing of income, where the sugar companies retain at least 60% of the gross income raises sustainability concerns that need to be addressed through a participatory approach involving all key stakeholders.Implications:To profit from contract sugarcane farming, farmers need to at least double their current mean yields per unit area, assuming that available land devoted to sugarcane excluding land for subsistence farming is at least 5 acres. Where this option is not possible, farmers should be encouraged to diversify their livelihoods to other cash crops through sustainable intensive systems. A more pro-active extension service involving the farmers, companies and ministry of agriculture will be required. Key words: Contract sugarcane farming, Livelihoods, Western KenyaenContract sugarcane farmingLivelihoodsWestern KenyaArticle