COMPLETION REPORT
Comparative Study of Contract Farming and Sustainable Agriculture in developed country and less developedcountry: Patterns, Impact, and Policy Implications: In case of Japan, Thailand and Lao PDR
Dr.Supaporn Poungchompu （+3）
Assistant Professor
Faculty of Agriculture
Khonkaen University
Contract farming in less developed countries and in developed countries differ in that either contract farming or
agricultural cooperatives are representative of vertical coordination between farmers and firms. This study examines theperformance of contract farming arrangements and is based on a review of the literature; publication and studies, as wellas previous and updated field research and field surveys. The field surveys were conducted on 110 Lao PDR farmers andon 80 Thailand farmers. Also, Japanese agricultural cooperatives in Tottori were visited. The results have shown that thecontract farming and agricultural cooperatives are forms of vertical coordination that can help the small farmers, whoneed capital and technical assistance, as well as those who need greater access to markets and to credit, especially thesmall holders in Thailand and in the Laos PDR. In other words, contract farming can be seen as a way of reducing
production costs for firms and farmers. In Lao PDR, the farmers were able to improve their families’ lives, andapproximately 57% of the farmers involved in contract farming had better livings standards which is consistent withSingh (2002) while in Thailand 82% of farmers gained the higher income as noted in the studies of Glover and Kusterer,
1990 and Birthal, et al., 2005. Thus, it can be deducted that the contract farming in Thailand has been rather successfuland has produced a more reliable income than in Lao PDR, although it has emerged with debt. It is obvious that thegovernment should provide better marketing information and play a greater role in supporting farmers, who areparticipating in contract farming, especially in the areas of farm skills and farm knowledge through farm extension, as
well as through farm credit in Laos PDR . The risks of production are that many farmers in Lao PDR lack knowledge
and understanding about growing sugarcane. Since many of these farmers have never grown any sugarcane before, they
are at risk of not finding suitable land having the appropriate weather conditions. Similarly, in Thailand although thecontract is income insurance, the stability of the market according to Glover (1984) and Cai, et al. (2008) does notguarantee other risks, such as climate, sweetness, and quality throughout the process which can affect the price. If theclimate is in a period of drought, it can impact the yield reducing it up to 60% (Robertson et al., 1999). Moreover, anadequate amount of water is required by sugarcane plants because surplus water results in the sugar cane being short andfull of water, and too little can prevent the growth of sugarcane. These factors can lead to reduced quality and quantity ofsugarcane production, and can cause lots of debts arising from the factory loans. On the other hand, JA’s provide not only
agricultural services, but also services for daily life. It is vital for empowering and improving small farmers’ access to themarkets. However, JA have high input costs and charge high interest rates, which has given rise to lower gains and lower
returns for farmers, as compared to returns from other marketing sources. In addition, the JA is more involved withnon-agricultural activities, such as banking and insurance. Thus, JA should become a stronger link to help farmers andshould give farmers a chance to access the open market.

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Publication of the Results of Research Project:
Verbal Presentation (Date, Venue, Name of Conference, Title of Presentation, Presenter, etc.)
Thesis (Name of Journal and its Date, Title and Author of Thesis, etc.)
Pouncgchompu ,S. 2015. Characteristic of Contract Farming for Farm Smallholder: Thailand, Lao PDR andJapan. (under review)

Book (Publisher and Date of the Book, Title and Author of the Book, etc.)

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