Stakeholders’ Preferences towards Contract Attributes: Evidence from Rice Production in Vietnam

Abstract

Contract farming is typically considered an appropriate measure for small-scale farmers to solve their constraints and problems. However, despite positive effects, low participation in and high dropout rates from contract farming schemes remain challenges. Therefore, this study objects to evaluate preferences for contract attributes and attribute levels among contracting buyers, farmers, and government officials through data triangulation from key informant interviews, focus group discussions, and participant observations. Based on Henry Garrett Ranking, Rank Based Quotient, and Rank Based Sum methods, results indicate that the most important attributes were price options, payment, delivery arrangement, input provision, input-use requirements, and product quality standards. Despite a consensus on the ranking of the contract attributes, the preferences for the attribute levels among the stakeholders were heterogeneous. It is recommended that attributes and their levels should be pertinent in contract agreements. Thus, contract design with an adjusted or premium price, 50% of estimated payment before harvesting and the rest after delivery three to five days or lump-sum immediate payment, delivery after harvesting, inputs provision by the contractors through the representative branches or stores located at the local areas or cooperatives, banning active-ingredients or flexible use of inputs from the contractors to produce Good Agricultural Practices or organic products are considerable options.