Contract farming has put farmers at a disadvantage as they have to shoulder all the burdens of investment and losses, with lucrative profits going into the pockets of companies engaged in the system, a seminar has been told.
Paisit Panitkul, a law lecturer at Chiang Mai University, said his study showed that contract farming was unfair to farmers as produce was supplied directly to giant agribusiness firms.
This resulted in companies taking advantage of farmers, he told the seminar at Chulalongkorn University yesterday.
Contract farming is a forward agreement between farmers and processing or marketing firms to supply agricultural products, frequently at predetermined and seasonally optimal prices.
Mr Paisit said many small farmers had entered into contract farming in the hope of getting a stable income.
“Contract farming represents a form of disguised exploitation, with companies taking all benefits from selling seeds, livestock, animal feed and farm equipment. Everything generates huge profits for agribusiness firms,” Mr Paisit said.
Food security meant farmers faced exploitation by conditions set by companies, he added. He urged all agencies concerned, including consumers, to push for fair farming contracts.
Farmer Choksakul Mahakharung said he raised pigs under a contract that required him to buy swine from one giant agribusiness company.
He began contract farming as he hoped it would guarantee him income security, but he had to take loans from a bank to run his farm.
“I have to strictly abide by many restrictions under this contract which is a deceptive one,” said Mr Choksakul, adding that he had plunged into debts of more than 10 million baht.
Contract farming has rapidly expanded to cover all types of agriculture, including swine, poultry and fish farms as well as growing rice and other crops.
Ubol Yoowa, a member of an alternative agriculture network, said contract farming treated farmers as merely labourers on their own farms.
Contract farmers had to supply their produce to a giant agribusiness company that did not take any responsibility for pollution problems caused by the use of chemicals or the release of pig excrement into public water sources, Mr Ubol said.
The contract farmers were forced to shoulder all the burdens of investment and the losses, he said.