Cassava Smallholders' Participation in Contract Farming in Nakhon Ratchasrima Province, Thailand

Abstract

The most important raw materials for bio-ethanol in Thailand are cassava, sugar cane and molasses. However, cassava has been promoted as a feed stock for ethanol due to the minimal inputs for planting, high productivity and all-year planting and harvesting. The most important factor influencing ethanol using cassava production is the price of cassava feedstock. Contract farming could decrease production costs, increase efficiency in markets, provide lower interest rates, decrease risk management and create symmetric information for cassava smallholders. The scope of this study includes cassava cultivation and factors influencing contract participation using logit analysis. Results from a survey consisting of 130 non-contractors and 127 contractors showed there was a verbal communication between farmers and agricultural cooperatives and written contractual agreement between agricultural cooperatives and processors. In addition, contract participation is significantly influenced by gender of household head, education of household members, number of agricultural groups, input costs, machinery costs, incomes and credit access.