Contract Farming in China: Perspectives of Farm Households and Agribusiness Firms

Contract farming in China has grown rapidly over the past 10 years. This paper examines the evolution of contract farming, and explores the incentives to engage in contract farming, preferred contract forms and contract performance from the perspective of both Chinese farmers and contracting firms. Firm and household perceptions of contracting are assessed using data obtained from village- and firm-level surveys. Farmers identify price stability and market access as the key advantages to contracts, while firms consider improved product quality as the primary incentive to use contracts.