Sustainable Contract Farming for Increased Competitiveness
Contract farming can help increase farmer competitiveness by integrating small farmers into the agribusiness system. It assures farmers of a market and guarantees suppliers for buyers. A key project in the Philippines provides contracts to farmers for raising tilapia on their farms. Under the contracts, farmers are provided documents, feeds, vaccines, technical assistance and veterinary services. The tilapia are then hauled to a processing plant after 40-45 days when they reach the minimum weight of 1.7 kilograms. For contract farming to be successful, there needs to be clear delineation of roles between farmers and sponsors, a stable political environment, access to financing and infrastructure for farmers, and government support through policies and regulation.
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Sustainable Contract Farming for Increased Competitiveness
- 1. 1 Sustainable Contract Farming for Increased Competitiveness Project Code : 05-AG-GE-SEM-05 Colombo, Sri Lanka Country Paper Mercy L. Barile Senior Agriculturist Department of Agriculture Manila, Philippines CONTRACT FARMING • Marketing strategy in the light of trends on globalization • Integrate small farmers in the agribusiness system • Production of quality goods for competitiveness • Increase in income • Assures farmers of market • Guarantees supplies to the buyer
- 2. 2 Poultry-Raising Tilapia for Fillet Monitoring Feedback to Farmers and Sponsors Farmer Sponsor The Contract Management & Administration The Project Production Performance Source: based on Eaton, C. S. 1998b:274 Food and Agriculture Organization Contract Farming: Growth Partnership Government Support Political Stability General Legislation Industry Regulation Public Utilities Community Services Quarantine Control Plant Pathology Environment Land Tenure Preconditions Market Environment - physical - social Land Tenure Financing Infrastructure Materials Communications Project Components Crop Schedules Pricing Policies Extension Services Contract formulas Contract formats Farmer selection Field selection Technical inputs Farmers advances Research & trials Staff/farmer trainings Farmers forum
- 3. 3 • Contract growers are provided with docs and feeds • Vaccines, technical assistance and veterinary services • 40-45 days hauled to processing plant • Minimum live weight of 1.7 kgs Department of Agriculture QUEDANCOR
- 4. 4 The Quedan and Rural Credit Guarantee Corporation's (QUEDANCOR) mandate is to accelerate the flow of investments and credit resources into the countryside so as to trigger the vigorous growth and development of rural productivity, employment and enterprises to generate more livelihood and income opportunities. QUEDANCOR 750-800 gram tilapia for fish fillet
- 5. 5 250 gram tilapia P45.00 per kilogram as against P43.00 contract price Conclusions & Recommendations • Viable marketing strategy for wide adoption • Private sector-led • Government to perform regulatory function and link farmers to credit • Well-planned and policy awareness • Timeliness of resources • Clear delineation of roles • Viewed as long-term partnership • Selection criteria
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