Abstract
Contract farming in China has grown rapidly over the past 10 years. This paper examines the evolution of contract farming, and explores the incentives to engage in contract farming, preferred contract forms and contract performance from the perspective of both Chinese farmers and contracting firms. Firm and household perceptions of contracting are assessed using data obtained from village- and firm-level surveys. Farmers identify price stability and market access as the key advantages to contracts, while firms consider improved product quality as the primary incentive to use contracts.
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*The authors are Associate Professor, Center for Agricultural and Rural Development, Zhejiang University; Professor of Economics and former Graduate Assistant, Department of Economics, Iowa State University. Funding for this project was provided in part by the National Science Foundation of China (70373027). Journal paper of the Iowa Agriculture and Home Economics Experiment Station, Ames, Iowa; project number 5002, supported by the Hatch Act and State of Iowa funds.
Appendix A
Appendix A
AGREEMENT ON PLANTING WATER RADISH
Contractor: Zhongsu Limited Company, City of Lanxi Contractee: The Government of Yongchang Town
In order to bring along and encourage farmers to develop contract farming and optimise agricultural structure, thus to ensure that farmers receive the substantial economic benefits, both contractor and contractee, through friendly consultation, have reached the following agreement on the water radish planting acreage of the farmers and the purchase of the yields:
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Contractor will entrust contractee with the responsibility for planting techniques and acreage in some villages. Contractee will provide the farm households and the planting acreage that should be over 3,000 mu.
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Contractee should be in charge of examining and supervising the farmers and to market to the contractor the entire planted water radish crop.
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The quality standard of the water radish sold by the farmers should meet the demands determined by contractor.
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Contractor offers a favourable price for the delivered goods: higher by 3% than the local market price at delivery time.
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On the expiration of the contract, contractor takes priority of renewing it if desired.
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This agreement will be valid for 2 years.
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This agreement becomes effective on the date of signing.
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Guo, H., Jolly, R. & Zhu, J. Contract Farming in China: Perspectives of Farm Households and Agribusiness Firms. Comp Econ Stud 49, 285–312 (2007). https://doi.org/10.1057/palgrave.ces.8100202
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DOI: https://doi.org/10.1057/palgrave.ces.8100202