Perceptions, Problems and Prospects of Contract Farming: Insights from Rice Production in Vietnam

Abstract

Contract farming (CF) is considered a relevant measure to tackle the challenges to sustainable development from the serious effects of climate change and the COVID-19 pandemic. Despite the positive effects of CF, low participation and frequent breaching of contracts remain challenges. Several studies have mentioned the advantages and disadvantages of CF but little is known about their rankings and perceptions of CF from the involved stakeholders. To address these evidence gaps, this study surveys stakeholders, ranks the perceived advantages and disadvantages of CF, and investigates the problems and prospects of CF. The study utilizes data triangulation from three stakeholders: farmers, contractors, and government policymakers. Data include twenty-seven key informant interviews (KIIs), seven focus group discussions (FGDs), and two participant observations (POs). Data are analyzed by a mixed method approach with methods of constant comparison, content analysis, and Rank Based Quotient (RBQ). The results indicate that while the main perceived advantage of CF relates to the outputs, the top three disadvantages of CF relate to issues likely to cause a breach of contract. The results also reveal that there seems to be a difference in the perception of CF’s advantages and disadvantages among the stakeholders. Despite the problems such as breaching several contract terms, mistrust, or market manipulation from the local collectors, CF in Vietnam is overall promising.