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Written by Mekong Institute

Interest in contract farming as a mechanism to coordinate linkages between farmers and agribusiness firms has grown significantly in the recent past, largely due to the international trends towards tighter alignment in agri-food supply chains. Because of its large but untapped potential in improving the lives of smallholder farmers, and enhancing agricultural productivity in general, contract farming has become a subject of interest of researchers, agriculturists, development workers, and farmers, among others, all over the world.  With this high demand for knowledge likewise comes the rising need for information-dissemination, technical assistance, and capacity-building programs that intend to educate various professionals concerned in this line of work.

Aiming to build the capacity of Southeast Asian participants in dealing with issues related to facilitating market linkages through contract farming operations, the Rural Development Department of the Mekong Institute (MI), with support from the Food and Agriculture Organization of the United Nations (FAO), conducted a four-day regional training workshop entitled “Planning and Implementing Contract Farming Operations” at the Mekong River Conference Hall, MI Annex, last Nov. 23-26.

The program was attended by junior to mid-level officials from Ministries of Agriculture, Commerce, Industry and Trade; extension agents; professionals from research and academic institutions; development project personnel; agribusiness private sectors representatives; and farmer group production and marketing leaders. Twenty-five participants, 15 of which were fully-funded by FAO and 10 of which are self-funded, have been selected for this course, each coming from twelve different countries – Cambodia, China, France, India, Indonesia, Lao PDR, Myanmar, Nepal, Philippines, Sri Lanka, Thailand and Vietnam.

Dr. Carlos da Silva, Senior Agribusiness Economist of FAO-Rome, and Mr. Ralph Houtman, Agribusiness Officer of FAO-Regional Office of Asia and the Pacific, facilitated the whole training workshop. Each of them discussed various topics in contract farming, specifically emphasizing how to plan and set up contract farming operations, as well as the considerations on legal aspects of contract design and reinforcement. After each topic, the participants were given the opportunity to ask questions, which gave way to a fruitful discussion and participatory learning.

The resource persons likewise presented case studies of contract farming in various countries, such as Brazil, which engaged the participants in a critical discourse and healthy debate among each other. After the first two days of lectures and in-house sessions, MI facilitated two field visits on the third day of the program. The participants, along with the resource persons and a number of MI staff, visited the Mitr Phol Sugar Company and a small swine farm performing contract farming with the Charoen Pokphand Group in Khon Kaen. The field speakers in each field sites encouraged the participants to ask and discuss about the actual application of contract farming, which reinforced the lessons taught in the lectures and further widened the participants’ understanding of contract farming in Thailand.

At the fourth and final day of the program, the participants were given an opportunity to have a hands-on experience of analyzing various contracts from around the world, and assess whether or not these contracts pass the FAO standards as discussed by the resource speakers. After presenting the results of their contract analyses, the participants were grouped into four and were asked to brainstorm about the challenges and opportunities for the promotion of buyer-farmer linkages through contract farming in Southeast Asia. Receiving a total weighted average of 4.53 (with 1 being the lowest and 5 being the highest) in the participants’ evaluation, the program was considered a success. One of the participants commended the overall quality of the presentations, citing that the lectures were “clear and concise; easy to digest and understand.”