Contract Farming Practices by Rock Melon Growers in Terengganu, Malaysia

Nalini, Arumugam and Mohd Annas, Shamsudin (2014) Contract Farming Practices by Rock Melon Growers in Terengganu, Malaysia. Journal of Agrobiotechnology, 5. pp. 85-94. ISSN 1985-5133

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Abstract

Contract Farming (CF) is essentially an agreement between unequal parties, companies, government bodies or individuals with small-scale farmers. The two parties will mutually agree on the price and quantity as well as quality of produce. In the era of globalization, CF is an effective way to coordinate production and marketing in agriculture. The scale to which contract farming is practiced in Malaysia is difficult to assess since quantitative data available are very limited. Much of the literature assumes that producers predominantly contract to earn additional income although a subset of studies do acknowledge, or at least imply that individual farmers may contract for other varying reasons. The objective of this study was to examine the rock melon growers’ attitudes toward CF. A total of 89 rock melon growers in the state of Terengganu, Malaysia, were interviewed. The data obtained were analyzed using SPSS to describe the respondents’ profile and contract farming practices. At the present moment, the rock melon growers have a contract agreement with the Terengganu Agriculture Development Centre (TADC) which functions as a facilitator agent to help in linking these rock melon farmers with the market. Contract farming could be evaluated as a way to improve rock melon growers’ production and marketing practices in Malaysia. The study revealed that rock melon farmers in Terengganu have mixed thoughts or perceptions on contract farming practices.

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