Sumernet

Making economic integration work for the rural poor through contract farming practices

With globalization, regional integration and greater foreign investment, the Mekong countries have experienced rapid economic growth in the last few decades. This growth has created both opportunities and challenges for farmers, the majority of whom remain small land holders. Commercially-oriented agricultural production is likely to continue to play a critical role in rural livelihoods in the Mekong Region.

Improvements in rural transport infrastructure and development of new markets have created new opportunities in particular areas of the Mekong Region and companies have expanded their cross-border agricultural production businesses using contract farming strategies.

Despite this, there is surprisingly little known about how the majority of small and/or poor farmers can benefit from contract farming. Evidence elsewhere suggests that impacts can be both positive and negative. The underlying concept is to identify the links between contract farming practices and the well-being of rural householders.
Specifically the research will address the following questions:

(1)    What is the current status of contract farming?
(2)    What are the positive and negative impacts of contract farming on rural households?
(3)    How can contract farming be made more beneficial to rural households?

The study aims to inform contract farming practitioners and boundary partners on how to improve the economic, social and environmental gains and reduce the burdens and risks associated with contract farming so that it contributes more to sustainable development in the GMS. 

Partnering institutions

1) Royal University of Phnom Penh, Cambodia (http://www.rupp.edu.kh/);
2) National Economic Research Institute, Laos (http://www.neri.gov.la);
3) Faculty of Public Health, Khon Kaen University, Thailand (http://ph.kku.ac.th/eng/);
4) Asia Development Research Institute, Myanmar (http://asiadevelopment.org/); and
5) Stockholm Environment Institute.

Countries covered

Country  Site
Cambodia Kompongspeu
Lao a) north (Luang Nam Thar)
b) south (Mitraphol Co.)
Myanmar Delta area (SW)
Thailand   Isaan (NE)

    
 
            
    
  

 

Vision and mission

Vision
Mekong Region decision makers can improve the ACMECS agriculture and industrial sector policies in relation to contract farming through redesign and development of strategies that prioritize the needs and well-being of the region’s marginalized, vulnerable and poorest people. The livelihoods of rural households can be helped towards sustainability through diversification of opportunities and development of alternative and rewarding contract farming practices.

Mission
The project will explore key information on household and village livelihood assets, options, strategies, and opportunities in relation to contract farming. The focus of this study is on poor small farm holders. This primary investigation, coupled with the collection of information characterising the status of contract farming in the region today, will help to ascertain the linkages between contract farming practices and the economic, social and environmental conditions of the rural poor.

Analysis of these results will provide the basis for a book chapter and recommendations which will inform regional policy and strategy actors of the GMS, namely: private sector contract farming representatives; farmer organisation representatives; national, state/provincial and local governments and NGOs.

The project will address the knowledge gaps concerning the status of contract farming in the GMS and the impacts of contract farming trends and practices on rural households. With an improved and more integrated picture of the region provided by this project, stakeholders will have improved capacity to better their livelihoods or those of others. In addition the engagement of stakeholders in the research process builds the strength of sustainability networks across sectors and forms the basis of future collaboration.

Boundary partners

A comprehensive list of potential boundary partners is supplied in the table directly below this one. However, some important private/NGO partners are: Mitrphol Sugar (http://www.mitrphol.com/en/), CEDAC (http://www.cedac.org.kh/). Although these partners are yet to be contacted.

Project’s objectives

The three main objectives of this study are:
(1)    To assess the current status of contract farming in the Mekong Region;
(2)    To identify the positive and negative impacts of contract farming on rural households; and
(3)    To explore how contract farming can be made more beneficial to rural households.

Methodology

(1)    Status investigation and literature review
The regional team will do a review on contract farming practices and characteristics, especially in the context of regional economic integration policies of the GMS. This will encompass literature reviews and stakeholder interviews of both the government and private sectors.

Specific information needed to assess the status of contract farming includes: farming locations and trends, key crops, land area, farming activities, business scale, investment and product volumes, number of labourers, agreement characteristics and market mechanisms.

(2)    Selection of country study sites
Based on all the national contract farming reviews, the regional team will collaboratively: (i) select one contract farming crop of high importance for each country; (ii) select a farming region/operation for each country; and (iii) randomly pick 1 or 2 villages which are located within the region/operation. The selection process will be informed by consultation with boundary partners such as farmers groups or rural community groups. It is anticipated that the entire community population will be sampled using household surveys (approximately 200 households or more for each country).

However, it is recognized at the outset that an important factor influencing the most suitable sampling design is the spatial distribution of farms belonging to the same contracting scheme. The sampling frame may need to be adjusted to take this into account, but we anticipate using some variant of stratified random sampling to select individual households.

(3)    Survey and interview instrument design
The survey and interview instruments will be designed to address the research questions, which are listed and expanded upon below. The instruments will be refined with community and expert consultation and pilot testing (refer to Section 2.7). The community consultation will allow farmers’ representatives and key stakeholders to anticipate the empirical study results and to discuss any gaps or issues in the implementation of the study. 

The surveys will cover such topics as: the livelihood characteristics of farmers, socio-demographic issues, challenges and opportunities when joining contract farming, forms of capital (financial, skills/knowledge and social capital) and the perceptions of contract farmers before and after joining contract farming. 

(4)    Village information profiling
Information related to village demographic, socioeconomic development activity, environment profile and common assets will be compiled from document sources and from interviewing the village leaders and local government agencies. This aims to quantify community characteristics which are closely linked to the conditions of household livelihood assets. The researchers will also conduct a walk-through survey across the village/s to obtain more community-based information.

(5)    Household surveys and in-depth interviews
Data collection
Household surveys (>200 per country) will be carried out with the household head or other knowledgeable adult using a standardized questionnaire translated into each of the local languages. A small section of each questionnaire will be tailored to address place-specific issues.

In addition, about 20 to 30 key informants in each country will be identified with whom in-depth interviews will be conducted.

Interviews will be carried out following a standardized interview guide, recorded in the field and fully transcribed. Appropriate coding will be developed and used to systematically analyze the interview texts. Analysis in first instance will be performed by each team working in the local language, followed by a regional analysis (see below).

Regional data analysis
Each country’s team will be responsible for data entry and data cleaning of the survey results of each country in the SPSS statistical software. Data results of each country will then be combined and appropriate comparative and quantitative analyses will be performed by the regional team. This analysis workshop will also involve the integration of the qualitative results from a regional analysis of the interview texts.

(6)    Focus group discussions
The aim of the focus group discussions (FGD) is to identify and explore key drivers and policy options that will improve the overall impact of contract farming on the rural poor. Boundary partners and survey/interview participants from all sectors will be engaged in the FGDs.   

(7)    Writing and disseminating study results
Each country team will work collaboratively with each other and the regional team. The country teams will provide the regional team with 5 to 10 pages of important points, drawing on both the quantitative and qualitative data analysis mentioned above. Then the regional team will write one paper intended for peer-review publication, one book chapter to be included in a SUMERNET volume and a policy brief (refer to Section 2.6 for details).

The study results will be disseminated to the stakeholders and boundary partners in terms of presentation and discussion at dialogue workshops (refer to Section 2.7). Methods for dissemination will also include additional innovative forms, such as online video clips, photos, opinion pieces and email-newsletters. 

Expected outputs

The research report should include the following chapters  in following orders:-
1. The current status of contract farming and knowledge on best fit practices. – intended as journal article 1
2.  The impacts of contract farming on livelihoods in the Mekong Region. – intended as a chapter for SUMERNET flagship book
3. Government policy and private practices in contract farming in the Mekong Region. – intended as the policy brief

Communication materials

Policy brief and internet updates

Planned project events

First contact with the stakeholders at the field sites will occur in the next month or two, along with the pilot household survey being conducted and the questionnaire revised.
Most recently on the 2nd to 4th of August, the projects’ protocol planning workshop was conducted in Bangkok.

Focal point for contact

Yanyong Inmuong, Project Leader
yanyong.inmuong@gmail.com
yanyong@kku.ac.th

Boundary Partners:

- Private companies, Individual employers Farmers and community groups Regional and Local Government Non-Government Organisations
Cambodia • Angkor Kasekam Roonroeung Co. (AKR)
• Mongritee Group
• Farmers’ Federal Network • Chamber of Commerce
• Ministry of Agriculture
• Provincial Agriculture Department
• Council for Agriculture and Rural Development (CARD)
• CSDF (Siem Reap)
• DAI (US)
• CEDAC Enterprises
Lao PDR • Mitr Lao Sugar Factory
• Savan Sugar Factory 
• Chinese refineries near the border
• Informal organizations
• Farmer community leaders
• Provincial Agriculture Dept (PAFO)
• District Office for Agriculture (DAFO)
• Nat. Agriculture and Forestry Research Inst. (NAFRI)
• Oxfam
• UNDP
• Chamber of Industry and Trade
Myanmar • Aung Yadada Group
• Gold Delta Specialized Company
• Ayeyarwaddy Green Land Specialized Company
• Informal farmers network
• Farmers’ heads in the villages
• Department of Agriculture
• Local authorities (i.e. Township Peace & Development Council)
• Department of Trade
• Rice Industry Association
• International Development Enterprise (IDE)
• Pyoe Pin (Development Agency)
Thailand • Charoen Pokphand Group (CP)
• Wang Kanai
• Mitporn
• IFS • Regional environmental office
• Amphur and Tambon planning offices
• Green Net
• WWF