Smallholders Inclusion in Staple Food Contract Farming : Collective Action Approach and its Impact on Farmers Income in Vietnam

概要

Contract farming (CF) is considered a solution to address market imperfections in linking farmers to markets by reducing transaction costs in agricultural production. However, only about 5 percent of smallholder farmers in developing countries are participating in CF schemes. This suggests that for CF to have a broad contribution to poverty reduction and increase small- scale farmers’ income, it needs to be included in many developing countries. One of the promising smallholder CF schemes is the Large Field Model (LFM) which was introduced in Vietnam in 2011, in which smallholder rice farmers pooled their land, formed cooperatives, and made production contracts with agribusiness firms.

　The goals of this study are to identify key factors that influence farmers’ decisions to participate in contract farming under LFM and whether it has a positive impact on farmer household income by employing econometric approaches and estimation tools to provide empirical estimates of collected data.

　According to the summary statistics from 102 samples collected in the study area, the majority of farming household heads are elderly males with extensive experience in rice farming. All of our respondents, regardless of CF status, are small-scale farmers, with each household cultivating an average of 0.28 hectares of paddy land.

　The main outcomes of this study are as follows : First, the findings show that contract farmers have less experience, own more cultivated area, and have paddy fields further from the main road than non-contract farmers, whereas no significant difference was found in age, education level, and gender of household head as well as a number of rice plots between two groups. Second, despite the fact that participating in CF is associated an increase in fertilizer, crop establishment, and pest control costs, our investigation suggests that LFM contract farming results in higher paddy yield, revenue, and income from rice cultivation for small-scale farmers. Regarding household income, we find that CF is negatively related to non-farm agricultural income and overall household income, suggesting that non-contract farmers reinvest in non-farm income opportunities. Third, because the magnitude of CF impacts varies by village, this study adds to the body of knowledge on the heterogeneous effects of contract farming on the same crops but under different agreements.