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Cross-Border Contract Farming Arrangement: Variations and Implications in the Lao People’s Democratic Republic
Author Kanokwan Manorom, David Hall, Xing Lu, Suchat Katima, Maria Theresa Medialdia, Singkhon Siharath, and Pinwadee Srisuphan
Year 2011
Organization ADB
This paper presents the variations and implications of contract farming arrangements in three case studies—cabbage, maize, and sugarcane—in the Lao People’s Democratic Republic (Lao PDR). The variations in contract farming resulted in varying implications in terms of agreement types, degree of fl exibility, extent of material support, and strength of relationships between the contracting farmer and the firm. Overall, contract farming has resulted in benefi cial material and non-material outcomes for the Lao PDR farmers as observed in the three case studies. The extent of the benefi ts varies according to the contract farming arrangement. The results of the case studies strongly suggest that there is no single contract farming model that can work best in all situations, and that contract farming models are crafted to address certain production and marketing limitations that prevent effi cient functioning of industries and markets. However, considering the higher levels of access to services of contract farming farmers and the high levels of overall satisfaction with contract farming, it would appear that engaging in contract farming is a valuable way to enter into commercial, cross-border agriculture. The policies promoting cross-border trade and small-scale contract farming appear to be generating positive results and should be maintained and enhanced.
Publisher ADB
Country Laos