The Participation of Malaysian Fresh Fruit and Vegetable Farmers in Contract Farming

Author(s): Norsida Man, and Nolila Mohd. Nawi

Keywords: Contract farming, factor analysis, fresh fruits and vegetables (FFV), marketing practices, influencing factors

DOI:
 

Full text download here

Abstract: : Contract Farming (CF) is seen as a means of fostering smallholder participation in new high-value product markets and improving quality standards, thus increasing and providing stability to smallholder incomes. This study aims to identify the factors related to CF as a new marketing practice among selected vegetable and fruit suppliers. The specific objectives are to identify factors influencing vegetable and fruit suppliers to engage in CF, and to suggest policy initiatives that promote CF sustainability. The factor analysis identified five factors that lead farmers in Peninsular Malaysia to participate in contract farming of fresh fruits and vegetables (FFV) in the context of the new supply chain namely market assurance, access to marketing information and technology, transfer of technology to improve farming practices, access to inputs and indirect benefit. The findings show that farmers are interested in CF because it helps them gain better knowledge in cultivation practices, get access to marketing information, market their produce and utilise farm resources. At the same time, CF or contract arrangements can be a valuable source of knowledge that can be employed to enhance their productivity.

References

Baumann, P. (2000). Equity and efficiency in contract farming schemes: The experience of

agricultural tree crops. London, UK: Overseas Development Institute.

 

Bernama. (2009, August 6). FELCRA to expand Contract Farming Programme.

Malaysian National News Agency. Retrieved from http://fama.bernama.com/

news.php?lang=&id=43074

 

Birthal, P.S. (2008). Making contract farming work in smallholder agriculture. National

Centre for Agricultural Economics and Policy Research, New Delhi 110 012

(India).

 

Borneo Post. (2010, March 9). Red rice boon to 40 contract farmers. The Borneo Post

Newspaper. Retrieved from http://www.theborneopost.com

 

Churchill, Jr. G.A., & Peter, J. P. (1984). Research design effects on the reliability of rating

scales: A meta-analysis. Journal of Marketing Research, 21(4), 360-375.

 

D’Silva, J.L., Shaffril, H.A.M., Jegak, U., & Samah, B.A. (2009). A review of contract

farming and factors that impinge youths acceptance to contract farming. European

Journal of Social Sciences, 11(2), 328-338.

 

Da Silva, C.B. (2005). The growing role of contract farming in agri-food systems

development: Drivers, theory and practice. Rome, Italy: Agricultural

Management, Marketing and Finance Service, FAO.

 

Dietrich, M. (1994). Transaction cost economics and beyond. London, UK: Routledge.

 

Eaton, C., & Shepherd, A.W. (2001). A guide, contract farming-partnership for growth.

(Agricultural Services Bulletin, 145: 1-182). Rome, Italy: FAO.

 

Hair, J.F., Black, B., Babin, B., Anderson, R.E., & Tatham, R.L. (2006). Multivariate data

analysis (6th ed.). USA: Pearson.

 

Hatcher, L. (1994). A step-by-step approach to using the SAS (R) system for factor analysis

and structural equation modeling. Cary, NC: SAS Institute.

 

Karaan, M. (2002). Transaction costs in contract farming models for mussel and

oyster farming in South Africa: Organisational and management implications.

Aquaculture Economics & Management, 6(5), 397-409.

 

Kosumas, W. (2006, July). Thailand’s potato industry: Highlights on contract farming.

Paper presented at Workshop on Promoting the Participation of SMEs from the

Greater Mekong Sub-region in Global and Regional Potato Value Chains, Union

of Myanmar.

 

Minot, N. (2007). Contract farming in developing countries: Patterns, impact and policy

implications. Retrieved from Cornell University Library: hhttp://cip.cornell.edu/

dns.gfs/1200428173

 

Norusis, M.J. (1993). SPSS for Windows: Professional statistics. Release 6.0. SPSS Inc.,

Chicago, IL, pp. 47-82.

 

Peter, J. P. (1979). Reliability: A review of psychometric basics and recent marketing

practices. Journal of Marketing Research, 16, 6-17.

 

Randi, I.R. (1992). Contract farming breeds big problems for growers. Farmers’ Legal

Action Group, Inc.

 

Saminathan, S. (2005). Sustainable contract farming for increased competitiveness:

Case study on poultry sector in Sarawak, Malaysia. Kuala Lumpur: National

Productivity Corporation.

 

Shaffril, H.A.M., D’Silva, J.L., Jegak, U., & Samah, B.A. (2010). Gender issue in contract

farming: The case of Malaysian students. American Journal of Agricultural and

Biological Sciences, 5(2), 204-209.

 

Simmons, P. (2003). Overview of smallholder contract farming in developing countries.

Agricultural and Development Economics Division, The Food and Agriculture

Organization of the United Nations.

 

Strohm, K., & Hoeffler, H. (2006). Contract farming in Kenya: Theory, evidence from

selected value chain, and implication for development cooperation, promotion of

private sector development in agriculture. Ministry of Agriculture and Deutsche

Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH.

 

Tabachnick, B. G., & Fidell, L. S. (2001). Using multivariate statistics (4th ed.). Needham

Heights, MA: Allyn & Bacon.