Rice Contract Farming in Vietnam: Insights from a Qualitative Study

Since 2002, Vietnam has implemented rice contract-farming policies to develop the linkage among stakeholders in the agricultural sector; however, there is very low participation of farmers. Therefore, this study aims to determine the perception on both advantages and disadvantages of rice contract farming (RCF); identify the reasons for non-participation and drop-out of rice contract farming; and indicate the typology of contract by using data from documentation, key informant interviews, and focus group discussions. The results indicate that farmers considered the guaranteed output price and stable income as the most advantages of RCF while the main disadvantages were reducing the household’s freedom or losing flexibility in making decisions on-farm production, management, and selling product; possible delays in payments, in input delivery, in harvesting, and output delivery. In addition, farmers did not want to participate in RCF because of reducing the household’s freedom in making decisions, not complying with RCF, not trusting cooperatives as well as enterprises, and because selling paddy to middlemen is easier and simpler. Farmers dropped out of RCF because the contracting companies breached the contract provisions. Farmers mentioned many provisions of the contract but the most important to them were payment, price options, and delivery arrangement.