This chapter explores the dynamics of smallholder inclusion in contract farming arrangements. Existing literature dominantly evaluates benefits of contract farming for those who have already entered the contract. The literature tends to assume that the participating farmers are likely to possess more assets and access to labor and resources, in comparison to non-participating farmers, in the same geography. However, specific conditions through which less well-off smallholder farmers could participate and benefit from the contract farming remain elusive. Drawing from a case study of the sugarcane sector in Mozambique, this chapter reveals that landholding size, household labor availability and gender have significantly influenced smallholder participation in contracted sugar production over time, confirming the literature that relatively better-off farmers tend to participate and benefit from contract farming. At the same time, the case study also highlights that a sugar mill’s production model called block farming has benefited female and less well-off farmers, as it worked to alleviate risks for smallholders to enter the contract farming model. The chapter underscores the need for more attention to be paid to block farming and similar production models in different contexts to promote inclusion of smallholders in contract farming policies and research.