Determinants of small farmers' participation in contract farming in developing countries: A study in Vietnam

Abstract

This study aims to explore the determinants of farmers' participation in contract farming by using a qualitative approach and empirically assess the impact of the factors withdrawn from the qualitative analysis and previous studies by employing the probit model in Vietnam. The qualitative analysis illustrates 10 original factors that affect farmers' participation in contract farming, including cooperative membership, quality certifications, sale preferences, farming difficulties, technology, supporting policy and program, estimation of oversupply, market information flow, association membership, and experience of contract farming failure. The quantitative analysis provides empirical evidence that female heads, firm consulting activities, firm scales, cooperative membership, quality certifications, and good-road locations can significantly and positively influence farmers' participation in contract farming. Cooperative membership and quality certifications are the most important factors. Contrary to the expectation, head education and good soil negatively impact farmers' participation in contract farming. Besides, bad soil can hinder farmers from participating in contract farming.