Global Partnership in Poverty Reduction: Contract Farming and Regional Cooperation
Setboonsarng, Sununtar | February 2008
Abstract
With globalization, market liberalization, and the rapid development of rural infrastructure, new market opportunities for high-value crops and livestock production are expanding in both developed and developing countries. This has translated into increased use of contract farming to establish market linkages for the poor in developing countries. In poor areas where smallholder subsistence production is the norm and where infrastructure and institutions to facilitate market exchange are not well established, contract farming is providing farmers with the assured sale of their crops and agro-business firms with a steady supply of agricultural output required by the market. In many instances, agro-business firms provide additional provisions, including technical support, improved farm inputs, credit, product accreditation, and assistance in the formulation of farmers’ groups. Consequently, poor farmers are able to transform from traditional cultivation and management practices to market-oriented commercial production, resulting in employment generation, income growth, and greater security. This paper reviews the pros and cons of contract farming from the point of view of different stakeholders, e.g., firms, farmers, government, and donors. In particular, this work examines contract farming in the Lao PDR and Cambodia and points to contract farming of organic crops as a promising option for poor farmers as the practice is consistent with traditional practices while associated with lower health and environmental risks. While the development of market linkages for farmers is traditionally viewed as a public sector responsibility, the establishment of necessary agro-services for a large number of small, unorganized farmers requires a tremendous amount of public sector resources. Given the limited availability of government and donor resources, private sector endeavors that serve to generate pro-poor growth may be the key to poverty alleviation.
Citation
Setboonsarng, Sununtar. 2008. Global Partnership in Poverty Reduction: Contract Farming and Regional Cooperation. © Asian Development Bank. http://hdl.handle.net/11540/3677. License: CC BY 3.0 IGO.Keywords
Commercial agriculture
Agriculture
Sustainable agriculture
Trade Volume
Agricultural Trade
Food Security And Trade
Regional Trade Agreements
Agroindustry
Agricultural trade
Commercial farming
Agroindustry
Sustainable development
Export volume
Export Development
Access to markets
Agricultural market
Agricultural economy
Distribution
Agricultural diversification
Agricultural resource
Farm produce
Land capability for agriculture
Food Supply
Rural land use
Technological innovations
Agricultural innovations
Farm supply industry
Natural resource
Adaptive natural resource management
Produce trade
Poor
Price Indexes
Intergrated rural development
Cost and standard of living
Population
Crop improvement
Rice farming
Crop
Food industry
Perishable goods
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