Perspectives from the Asia-Pacific
Edited by Matthew Tonts and M. A.B. Siddique
Chapter 10: Contract Farming and Technology Transfer: Perspectives from the Philippines’ Oil Palm Industry
Paul Huddleston INTRODUCTION The purpose of this chapter is to examine how contract farming systems in the Philippines’ oil palm sector have influenced the adoption of new agricultural technologies. Contract farming is generally part of a wider process of vertical integration within a commodity system, whereby a farmer grows a commodity as part of an agreement with an external party. In most cases this contract is with a processing company, which agrees to purchase the commodity. While the form of contract varies considerably, it usually involves agreements around price, quality and time of delivery. In some cases, the contracting firm also offer access to agronomic advice, new technologies, and economic or other forms of assistance. This access to technology is often regarded as critical in the promotion of wider processes of rural development (Eaton and Shepherd 2001). Technology is often seen as the path to a more productive and efficient farming sector, improved incomes, and increased levels of household well-being. Noteworthy are major bio-technological advances, as well as improvements in transport, storage and packaging technologies. Meanwhile, the use of sophisticated equipment that improves product quality, reduces labour demand and ensures consistency in quality has expanded significantly, to such an extent that the implications for the small farmer in developing countries cannot be underestimated (Narayanan and Gulati 2002, p. 49). In this regard, Mayer (2002, p. 62) noted: ‘One of the main opportunities, which globalization is said to offer to developing countries, is that they would have better access to the...
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