Assessment of contract farming at Lam Nam Oon, Thailand : a combined effort of USAID and the Royal Thai Government

This document relates the development of contract farming at the LNO site, explains the strategies employed by USAID and the Royal Thai Government, reviews the significant outcomes and impacts of the growth of managed arrangements (i.e., contract farming), and recommends improvements in project design for strengthening the agribusiness sector in developing countries. Lessons learned from the LNO experience include the following. (1) Government officials have a crucial role to play in engendering trust between farmers and agribusiness firms. (2) Contract farming is not by its nature biased towards any one group; in the LNO case, contract farming produced clear benefits to both small farmers and the firms to which they sold their produce, and it opened avenues for women to become technicians and managers. (3) A core working unit should be established on-site to troubleshoot problems as they arise, rather than relying on multiple committees. (4) Institutional strengthening is crucial in fostering the government's role, particularly its ability to negotiate with the private sector; training can best be accomplished through direct contact with specialists possessing relevant firsthand experience. (5) It is important to set realistic time horizons for the accomplishment of goals. (6) Crop testing should be performed on-site, and be guided by market considerations. (7) Water control will always be a leading concern of the private sector. (8) A monitoring unit should be set up in the post-project period to help farmers and firms to keep abreast of new crops and opportunities and to maintain competitive advantage. (9) Measures to protect against the hazards of pesticide spraying, particularly training of farmers in safe spraying practices, should always be incorporated into project design. Includes bibliography.