TY - JOUR

T1 - Adoption of contract farming for managing agricultural risks

T2 - a case study in rice production in the Mekong Delta, Vietnam

AU - Pham, Thuyen Thi

AU - Dang, Hoa Le

AU - Pham, Ngoc Thi Anh

AU - Dang, Huy Duc

N1 - Funding Information: The authors gratefully acknowledged the funding from Nong Lam University under grant number CS-CB18-KT-02. The authors also express our sincere thanks to the support of Mrs. Huong, Mrs. Ngoc, Mr. Phuc from the Department of Agricultural and Rural Development of An Giang province, Mrs. Dung in the Department of Agriculture and Rural Development of Thoai Son district, Thoai Giang, Vinh Binh and An Binh cooperatives, and also student enumerators from An Giang University for data collections. Publisher Copyright: © 2021, Emerald Publishing Limited.

PY - 2021

Y1 - 2021

N2 - Purpose: Farmers' risk attitudes and risk perceptions play an essential role in shaping risk management strategies to address risks and uncertainties. Contract farming is considered as one of the feasible approaches to tackle farmers' concerns. However, risk perspectives under various categories have not been included in studies on farmers' preferences for contract farming in the literature, especially in Vietnam. This study aims to determine factors affecting farmers' choices of different contract farming practices. Design/methodology/approach: The explanatory factor analysis (EFA) and multinomial logit model (MNL) were applied to explore the impacts of risk perspectives on farmers' preferences for contract farming. Data have been collected from 211 rice farmers in An Giang Province, “the rice bowl” of the Mekong Delta, Vietnam. Findings: The study found that farm size, cooperatives, extension, market access and trust have significantly impacted on contract participation while a delay payment was a barrier for farmers' motivation to opt for the contract. Farmers' contract choices were also influenced by their risk attitudes and perceptions under different risk dimensions. The financial, policy and human risk-averse behavior predisposed farmers to single out the full contract while the policy and human risk-loving and production, market and finance risk-averse respondents were in favor of the marketing contract. Moreover, the findings indicated that the more farmers concerned about risk of weather and market, the more choices for the full contract, whereas the risk perceptions of weather and policy encouraged farmers to use the limited contract. By contrast, farmers who perceived the impacts of risk of diseases/pests and human were likely to adopt the marketing contract. Research limitations/implications: This study just focuses on collecting data from farmers’ perspective. Future studies involving stakeholders such as enterprises and policy makers are strongly recommended so as to design suitable contracts and enforce contract schemes effectively in Vietnam. Originality/value: The findings also contribute to the literature on different types of contracts and the multidimensional aspect of risk for rice production in Vietnam.

AB - Purpose: Farmers' risk attitudes and risk perceptions play an essential role in shaping risk management strategies to address risks and uncertainties. Contract farming is considered as one of the feasible approaches to tackle farmers' concerns. However, risk perspectives under various categories have not been included in studies on farmers' preferences for contract farming in the literature, especially in Vietnam. This study aims to determine factors affecting farmers' choices of different contract farming practices. Design/methodology/approach: The explanatory factor analysis (EFA) and multinomial logit model (MNL) were applied to explore the impacts of risk perspectives on farmers' preferences for contract farming. Data have been collected from 211 rice farmers in An Giang Province, “the rice bowl” of the Mekong Delta, Vietnam. Findings: The study found that farm size, cooperatives, extension, market access and trust have significantly impacted on contract participation while a delay payment was a barrier for farmers' motivation to opt for the contract. Farmers' contract choices were also influenced by their risk attitudes and perceptions under different risk dimensions. The financial, policy and human risk-averse behavior predisposed farmers to single out the full contract while the policy and human risk-loving and production, market and finance risk-averse respondents were in favor of the marketing contract. Moreover, the findings indicated that the more farmers concerned about risk of weather and market, the more choices for the full contract, whereas the risk perceptions of weather and policy encouraged farmers to use the limited contract. By contrast, farmers who perceived the impacts of risk of diseases/pests and human were likely to adopt the marketing contract. Research limitations/implications: This study just focuses on collecting data from farmers’ perspective. Future studies involving stakeholders such as enterprises and policy makers are strongly recommended so as to design suitable contracts and enforce contract schemes effectively in Vietnam. Originality/value: The findings also contribute to the literature on different types of contracts and the multidimensional aspect of risk for rice production in Vietnam.

KW - Contract farming

KW - Farmers' preferences

KW - Risk attitudes

KW - Risk perceptions

KW - Risk preferences

U2 - 10.1108/JADEE-05-2021-0107

DO - 10.1108/JADEE-05-2021-0107

M3 - Journal article

AN - SCOPUS:85115767218

JO - Journal of Agribusiness in Developing and Emerging Economies

JF - Journal of Agribusiness in Developing and Emerging Economies

SN - 2044-0839

ER -