[Truncated abstract] This thesis reviews the role that contract farming plays in the development process through an examination of the oil palm industry in Ghana and in the Philippines. It contributes to ongoing debates concerning agricultural liberalisation in developing economies. The general view is that while the private sector can provide access to capital, technology and markets, the transition to a market-led system will increase the financial vulnerability of farmers, particularly smallholder farmers, through unequal power relationships. Of particular concern is the capacity of the private sector to alleviate poverty and promote social equity amongst small rural landholders. At the heart of much of the debate is the issue of contract farming, which has increased rapidly in line with structural adjustment in the agricultural sector. One of the central difficulties in drawing any conclusion on whether contract farming should be encouraged or discouraged, is the lack of comparability between the large number of types of schemes, crops being contracted, the `actors' involved and the socio-economic, political and institutional environments in which contract farming schemes are nurtured. This study has focused on the role that contract farming plays in the pursuit of development through an analysis of the key socio-economic issues involved with the adaptation of contract farming in the oil palm industries in the Philippines and in Ghana. This analysis allowed for the identification of conditions under which the impacts of contract farming schemes can either be augmented or mitigated. The research found that cultivating oil palm has the propensity to reward outgrowers with increasing income and a better access to knowledge, information and technology, capital and credit, agricultural inputs, markets and other services. ... The two outgrower programs are presently successful and do not show signs of the major problems identified by researchers in other areas. However, both governments need to ensure that a comprehensive policy and regulatory framework for private sector agricultural development is put in place. A strong private sector could provide the vehicle for agricultural development and the reduction of poverty in the countryside, however, both governments and the various private sector companies engaged in oil palm production need to work in partnership with each other and the outgrower community towards the goal of a diversified and expanded agricultural production base.