• Asia-Pacific Journal of Business
• /
• v.11 no.1
• /
• pp.27-44
• /
• 2020

Purpose - This study examines the factors that influence the performance of contract farming by agricultural cooperatives from the agency theory and resource-based view of the firm. Design/methodology/approach - This study collected 1,090 data related to a sample of contract information between agricultural cooperatives and producers from national agricultural cooperatives federation. In order to examine the performance of contract farming, we use the multiple regression analysis. Findings - Incentives may reduce agency problems by increasing producers' motivation and discouraging their opportunistic behavior. Total asset size and education expenses function like resources that lessen the risks coming from environment uncertainty, and also facilitate the contract farming between producers and agricultural cooperatives. Research implications or Originality - By analyzing the factors that influence on the performance of contract farming between producers and agricultural cooperatives, we propose that incentives, and resources may improve the performance of contract farming between agricultural cooperatives and producers. Overall, the contract farming can co-create the economic efficiency and effectiveness while minimizing risks and uncertainty.

• Journal of the Economic Geographical Society of Korea
• /
• v.19 no.4
• /
• pp.712-728
• /
• 2016

This study examines the foundations of contract farming, the extent of corporate vertical coordination, and farmer's land use in regards to the contract farming between discount store and watermelon farmers in Buyeo-gun, Chungcheongnam-do. In the above case, contract farming is led by the group of producers. As the corporate's role is limited due to the specification of watermelon breed, contract farming takes the form of procurement contract with restrained levels of corporate vertical coordination. Thus, it has become common for contract farmers to freely enter and leave contracts and sign contracts with multiple clients. Furthermore, farmers participate in contract farming by using contract breeds in existing crop rotation systems. Through this process, watermelon farming is undergoing a process of diversification via the spread of contract varieties in this region.

• Journal of the Economic Geographical Society of Korea
• /
• v.19 no.3
• /
• pp.535-549
• /
• 2016

The contract farming scheme of today is a new system that allows the forward and backward linkage of the agribusiness through vertical coordination while also leading the changes within the agri-food system. As contract farming of agricultural products becomes routine in both advanced and developing countries alike, it is gaining the attention of researchers in various fields, including geography. This research discusses the research trends and problems regarding contract farming through literary research on the research progress of foreign researchers on contract farming. The content of the research specifically includes explanations regarding the relationships between the rise of contract farming and changes in the agri-food system and discusses the basic theoretical foundations of contract farming. The research also defines the economic and environmental effects of contract farming and its purpose in regional development policies and concludes with discussions of the possible future research subjects on contract farming.

• Journal of the Economic Geographical Society of Korea
• /
• v.27 no.1
• /
• pp.1-17
• /
• 2024

The purpose of this study is to identify the role of each party in relation to the contract farming of cabbage which is taking place under the contract between the local trader of agricultural produce that supplies raw cabbage to company "D," a manufacturer of kimchi, and the cabbage farm where the cabbage is grown, and to describe the changes brought by the contract farming to the agriculture of the contract area. As a result of the study, it was discovered that, while the farming of cabbage in the contract area used to be led by farmers, it is now increasingly being controlled by the local traders of agricultural produce. First, as the key player in the decision-making related to the cabbage farming in the main cabbage producing areas, local traders of agricultural produce are replacing the role of farmers by supervising the entire production process and controlling the overall cabbage farming in the contract area. Second, in the main cabbage producing areas, local traders of agricultural produce are becoming a key farming entity by carrying out functions that are comparable to those of farmers and playing a major role in the second half of the agricultural work at the farms in the contract area. This can be considered as the result of the balance between the demands of the local traders of agricultural produce who need to secure contract volume and manage the quality of their produce and the demands of the farmers in key cabbage producing areas who are facing difficulties due to the increase in the number of elderly farmers and a shortage of manpower.

• Journal of the Economic Geographical Society of Korea
• /
• v.25 no.4
• /
• pp.451-468
• /
• 2022

Leading enterprises in contract farming are in control of agricultural production and influence the structure of the agricultural system in contract areas. This study focuses on the contract farming of potatoes for manufacturing chips, which uses a high proportion of domestic raw materials, and identifies the characteristics of contract farming between confectionery company 𐩒 and potato farms in Haean-myeon, Yanggu-gun, Gangwon-do. This study also analyzes the impact of contract farming on local agriculture from the perspective of the industrialization of agriculture. The results of this study demonstrated that contracting companies ensured the quality of potatoes and smooth agricultural operations by first preferentially selecting farmhouses with land that is easy to work with and then supplying the necessary agricultural machinery to promote the intensification of their work. In addition, contracting companies influenced the centralization of the agriculture sector by selecting farmhouses capable of contracting over a certain scale and guaranteeing them sales channels and the specialization of potato farming in contract areas, mainly through the supply of processing varieties and the spread of cultivation technology. The results confirmed that these three dimensions of contract farming promoted the industrialization of local agriculture.

• Journal of the Economic Geographical Society of Korea
• /
• v.18 no.4
• /
• pp.522-538
• /
• 2015

The objective of this study was to review how contract farming started in Gochang-gun and identified its characteristics among the contracting parties and the consequent changes in the region's dairy industry with regard to the contract production of organic milk in Gochang-gun, Jeollabuk-do, Korea in conjunction with the Maeil Dairy Industry Corporation. The contract was established in keeping with the product diversification strategy of the company after a crisis due to opening of the market, taking advantage of the clean environment of Gochang-gun and positive attitudes of the local government and dairy farmers. The expansion of the participating farms led to a production gap among dairy farms in the region; however, the overall concern over the conventional practice of contract farming was mitigated as the organic farming spread with the conversion of the contract farms to organic farms.

• Korean Journal of Organic Agriculture
• /
• v.22 no.2
• /
• pp.241-254
• /
• 2014

This case study surveyed management situations of environmentally friendly farming(EFF) producers' organization and their main activities. Farmers are aging as an average age of 55-year old and producing fruit-bearing vegetables. The EFF did not increase farmer's income, however, price and income was stabilized more than that of conventional farming because of contract farming. Farm household liabilities are caused by purchasing agricultural machinery, materials and so on. Farmers of EFF have been also cultivating conventional farming, but they don't plan much conversion intention of conventional farming into EFF owing to lack of differentiated and stable market for their EFF products. And they are guessing that EFF income will increase a little. For increasing of EFF income, they think that it is necessary to reduce production cost, produce high quality production, develop processing foods, enlarge contract farming and so on.

• Korean Journal of Organic Agriculture
• /
• v.17 no.4
• /
• pp.441-461
• /
• 2009

Switching to organic farming practices in agricultural production reaches the end of the period it takes an average of five years. During this period, agricultural soil management to improve the investment must be sustained. Results of the survey of environment-friendly agricultural lease rates appear to approximately 54.2% lower than agricultural practices. Environmentally friendly agricultural land is leased on a long transition period of the contract cost, many buried incompleteness, uncertainty of contract fulfillment(opportunistic behavior) occurs when the transaction costs. This ultimately can hinder the spread of organic farming. Thus, the qualitative development of organic farming and land leasing in order to minimize transaction costs, should that occur. The alternative 'cooperative long-term lease contract' is a system.

• Food Science and Preservation
• /
• v.16 no.4
• /
• pp.490-498
• /
• 2009

This study attempted to examine the profitability and marketing costs of seed potato under contract farming system of BADC (Bangladesh Agricultural Development Corporation) with the help of primary and secondary data. Total 45 contract farmers were randomly selected. Attempts were made to calculate costs, returns and profitability of seed potato production under contract farming system, and to identify marketing channels of seed potato. The field level data were collected by a farm survey during the months of April 2005 through direct interviews with contract farmers and registered dealers using a structure survey questionnaire. The results showed that the gross return per hectare was Tk. 252,464 for all categories of farms. Cost of seeds, fertilizers, pesticides, irrigation and human labor were critical inputs for profitability of seed potato. Cobb-Douglas production function analysis was used to determine the effects of the key variables to seed potato production under contract farming system. The elasticity of seed potato production was at 0.727 for all categories of farms. The findings exhibited that the summation of elasticity of different inputs for seed potato production was less than one, implying that the production function exhibited decreasing returns to scale. Registered dealers and Upazila Sales Centers were involved in seed potato marketing formed a straightforward marketing channel. The total marketing costs of registered dealers were Tk. 759.49 per ton of seed potato. The net marketing margin of registered dealers was estimated at Tk. 465.51 per ton of seed potato. The selected contract farmers and registered dealers faced a number of problems and some of recommendations were suggested.

• Journal of the Economic Geographical Society of Korea
• /
• v.16 no.4
• /
• pp.585-596
• /
• 2013

This study aims to identify the process by which local farmers are integrated into the transnational agri-food system. To that end, this study investigated the purpose and reality of the contract farming for Gold Kiwifruit between Zespri International, a transnational fruit producer based in New Zealand, and farmers in Seogwipo-si, Jeju Island. Through this contract farming, Jeju farmers were contributing to Zespri's global distribution strategy and helping the corporation meet local demand. In the process, local farmers were being integrated into the transnational agri-food system led by Zespri. In the cooperation between these two parties, the company took a limited role in providing production resources, and it consulted local producers in applying production technologies to local sites. Thanks to such practices, the company's influence on local farming was limited, and local farmers were able to function proactively in production. Therefore, the company and the farmers maintained a horizontal relationship.