Determinants of Fresh Fruits and Vegetables (FFV) Farmers’ Participation in Contract Farming in Peninsular Malaysia

Subject Areas : Environmental policy and management

Nalini Arumugam ¹ , Fatimah Mohamed Arshad ² , Eddie Chiew F.C ³ , Zainalabidin Mohamed ⁴

1 - Lecturer at Faculty of Agriculture and Biotechnology, UniSZA
2 - Director, Institute of Agricultural and Food Policies Studies at University Putra Malaysia
3 - Lecturers at Department of Agribusiness and Information Systems, Faculty of Agriculture, Universiti Putra Malaysia
4 - Lecturers at Department of Agribusiness and Information Systems, Faculty of Agriculture, Universiti Putra Malaysia

Received: 2015-08-31 Accepted : 2015-08-31 Published : 2011-06-01

Keywords: Supply Chain, Contract Farming, FFV Farmers and Logit Analysis,

Abstract :

The purpose of this research was identifying socio-economic characteristics affected on respondents’ participation in contract farming. The survey was conducted using structured questionnaire in populous states namely Kedah, Kelantan, Terengganu, Pahang, Perak, Selangor and Johor in Peninsular Malaysia. A total of one-hundred and sixty seven FFV farmers were randomly selected and personally interviewed. Logit analysis was carried out to identify determinants that influenced fresh fruits and vegetables (FFV) farmers participating in contract farming. The findings in the paper show that, based on the output from logistic regression, ownership, land size, education background, perceived benefit, complicated process, lacking in opportunities and price risk are dominant variables influencing FFV farmers’ willingness to participate in contract farming. Land ownership, land size, education and perceived benefit are dominant variables that positively influenced FFV farmers to participate in contract farming. Complicated process, lack of opportunities and price risk negatively influenced FFV farmers’ participation in contract farming.