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Baby Corn Business under Contract Farming System

Author

Listed:
  • Pornpimol Tongthammachat
  • Visit Limsombunchai

    () (Department of Agricultural and Resource Economics,Faculty of Economics,Kasetsart University,Thailand)

Abstract

This study compares costs and returns between contract and non-contract farmers on baby corn production and to compares a company’s procurement costs through contract versus non-contract (open market) channels. A survey of 60 farmers in Kanchanaburi and Nakornpathom was conduced for the data of crop year 2005/2006 using questionnaires. The results indicated that the socio-economic situations, problems, and obstacles of both groups were not different. The comparisons of costs and returns between two groups of baby corn farmers showed that the contract farmers had higher net incomes than those of the noncontract farmers. The procurement costs of contract channel were higher than those of noncontract channel. However, the contracting company was willing to pay the additional costs for high quality and traceability (known source of origin) of the products.

Suggested Citation

  • Pornpimol Tongthammachat & Visit Limsombunchai, 2008. "Baby Corn Business under Contract Farming System," Working Papers 200801, Kasetsart University, Department of Agricultural and Resource Economics.
  • Handle: RePEc:kau:wpaper:200801
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    File URL: http://agri.eco.ku.ac.th/RePEc/kau/wpaper/are200801.pdf
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    More about this item

    Keywords

    baby corn; contract farming; costs and returns; procurement costs;

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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