This chapter examines the implementation of a state/donor-driven contract farming (CF) system in the cotton value chain in Tanzania. It analyses the division of labour between two main stakeholders in the cotton chain in Tanzania–the farmer business groups and the cotton ginneries–in implementing CF by documenting some of the outcomes of CF during the pilot phase. The chapter provides some broader reflections on the fragility of the organisational set-up and incentive structures within which private CF in cotton has evolved in Tanzania. Until the onset of economic reforms in the early 1990s, the cotton sector in Tanzania was characterised by widespread state regulation and intervention, although the instruments and agents used changed from time to time. The chapter examines some of the barriers to state-led upgrading interventions in agricultural value chains. It deals with the conceptual debates on upgrading and value chain coordination in agricultural value chains.