Contract farming can help increase farmer competitiveness by integrating small farmers into the agribusiness system. It assures farmers of a market and guarantees suppliers for buyers. A key project in the Philippines provides contracts to farmers for raising tilapia on their farms. Under the contracts, farmers are provided documents, feeds, vaccines, technical assistance and veterinary services. The tilapia are then hauled to a processing plant after 40-45 days when they reach the minimum weight of 1.7 kilograms. For contract farming to be successful, there needs to be clear delineation of roles between farmers and sponsors, a stable political environment, access to financing and infrastructure for farmers, and government support through policies and regulation.

1. 1
Sustainable Contract Farming for
Increased Competitiveness
Project Code : 05-AG-GE-SEM-05
Colombo, Sri Lanka
Country Paper
Mercy L. Barile
Senior Agriculturist
Department of Agriculture
Manila, Philippines
CONTRACT FARMING
• Marketing strategy in the light of trends on
globalization
• Integrate small farmers in the agribusiness
system
• Production of quality goods for competitiveness
• Increase in income
• Assures farmers of market
• Guarantees supplies to the buyer

2. 2
Poultry-Raising Tilapia for Fillet
Monitoring
Feedback to Farmers and Sponsors
Farmer Sponsor
The Contract
Management & Administration
The Project
Production Performance
Source: based on Eaton, C. S. 1998b:274
Food and Agriculture Organization
Contract Farming: Growth Partnership
Government Support
Political Stability
General Legislation
Industry Regulation
Public Utilities
Community Services
Quarantine Control
Plant Pathology
Environment
Land Tenure
Preconditions
Market
Environment
- physical
- social
Land Tenure
Financing
Infrastructure
Materials
Communications
Project Components
Crop Schedules
Pricing Policies
Extension Services
Contract formulas
Contract formats
Farmer selection
Field selection
Technical inputs
Farmers advances
Research & trials
Staff/farmer trainings
Farmers forum

3. 3
• Contract growers are provided
with docs and feeds
• Vaccines, technical assistance
and veterinary services
• 40-45 days hauled to
processing plant
• Minimum live weight of 1.7
kgs
Department of Agriculture QUEDANCOR

4. 4
The Quedan and Rural Credit Guarantee
Corporation's (QUEDANCOR) mandate is to
accelerate the flow of investments and credit
resources into the countryside so as to trigger
the vigorous growth and development of rural
productivity, employment and enterprises to
generate more livelihood and income
opportunities.
QUEDANCOR
750-800 gram tilapia for fish fillet

5. 5
250 gram tilapia
P45.00 per kilogram as
against P43.00 contract
price
Conclusions & Recommendations
• Viable marketing strategy for wide adoption
• Private sector-led
• Government to perform regulatory function and link
farmers to credit
• Well-planned and policy awareness
• Timeliness of resources
• Clear delineation of roles
• Viewed as long-term partnership
• Selection criteria

6. 6