Marks, 2022

https://www.mrlg.org/wp-content/uploads/2022/03/Thai-CF-Act-Thematic-Study-FEB2022.pdf

Marks, D. (2022). The Contract Farming Promotion and Development Act (2017) of Thailand: Origins and impacts to date. MRLG Thematic Study Series, 12.

Contract farming in Thailand

In livestock raising, for example, farmers borrowed to invest in new technologies and necessary technical infrastructure, such as evaporativ cooling systems, backup electricity generators, and livestock houses, typically on a long-term basis, such as five to ten years. The typical start-up costs for livestock farmers are far higher than those for crops, while the perceived high returns to livestock do not always materialise.

Contract farmers are also dependent on the companies for their inputs and are sometimes obliged to procure them from the company exclusively. On some occasions, companies have sold inputs such as fish feed to farmers at higher rates than those found in the market (ibid.). A study found that over 70 percent of farmers’ production costs were linked to various forms of payment to agribusiness, with this amount rising to as high as 85-90 percent in fish and poultry CF schemes (Chiengkul 2017).

30 contract poultry farmers were interviewed and 20 were unsatisfied with their contracts. Reported problems included companies not honouring the terms or not giving farmers copies of the contract, both of which are illegal under the new law, yet still occur.