Contract Farming and Leaseback Arrangement of Banana in Calinan District, Davao City: ARB’s Contract Choice, Impact, and Gains

The study assessed the contribution of contract farming of banana to the agrarian reform beneficiaries as an alternative to leaseback arrangement in Calinan District, Davao City. Specifically, the study aimed to characterize and compare the contractual schemes of contract growing and leaseback arrangement using the adapted growership model from the contract farming framework, identify the factors that influenced ARBs decision to engage in contract farming, and identify other potential gains that can be derived from growership other than economic gains. The analysis utilized primary data that were gathered through surveys and interviews among ARBs who were engaged in such contractual arrangements. Results showed that contract growing as governed by production and sales agreement is focused on banana production that involves the participation of growers (ARBs) who produced either individually or collectively through agricultural cooperative, while leaseback arrangement operates under land use agreement. The amount of land rent is P18,000 per ha per yearr with P500 annual increase. Using econometric approach, education and farm size were found to be significant factors that influenced ARBs decision to engage in contract growing with 70% probability of participation based on Logit regression. In terms of social gains such as self-fulfillment and confidence, there is no significant difference on this in both contractual arrangements. Moreover, the formation of cooperatives in both ventures is essential for it to become effective. The success of every contractual agreement largely depends on the collaboration of stakeholders. Having this, there should be an enhancement and strengthening of cooperatives that will organize ARBs through which collaborative farming can be obtained.