Contract tree farming and Small landholders: Drivers of adoption in Thailand Source: Boulay, Axelle. 2010. Contract tree farming and smallholders: Drivers of adoption in Thailand, PhD Thesis, Australian National University, Australia 1 [email protected]
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Contract tree farming and smallholders: Drivers of adoption in Thailand
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Contract tree farming and Small landholders:
Drivers of adoption in Thailand
Source: Boulay, Axelle. 2010. Contract tree farming and smallholders: Drivers of adoption in Thailand, PhD Thesis, Australian National University, Australia
- Academic research: many case studies and economic articles on risk strategy
- Few comprehensive studies on smallholders’ interests
- Little academic research- Many reports from development agencies and research institutes, but most are too descriptive, superficial
- Weak socio-economic analyses
Donor agencies are highly supportive of partnerships but very few studies provide a basis for understanding where, how and under what conditions smallholders enter into partnerships.
Theoretical framework Contract theory and economic theory: Adoption of contract
tree farming is influenced by the utility function that trades off the household’s desire for more income, more leisure time, less risk and less effort.
Diffusion of innovation theory: Adoption is influenced by attributes of the innovation optional/collective/authority decision making communication channels social system change agents’ diffusion strategies incentives stages of the innovation-decision process
Livelihood theory: Adoption is influenced by each of the five types of capital the vulnerability context transforming structures and processes livelihood strategies [email protected] 7
Case study:Contract eucalypt tree farming in Thailand
336,000 ha of eucalypts under contractual arrangements = 70% of total eucalypt area
Eucalypt tree farming = source of income for many smallholders critical to the resource supply of pulp and paper companies
Production costs (baht/ha) 10,981 12,950 32,638 12,297 c
Profit (baht/ha) 11,879 14,688 20,242 10,243 d
a Glutinous rice is mostly grown for home consumption b eucalypts spacing 3x2 m. (approximately 270 plant/rai)c include 13,219 baht/ha in year 1; 8,687 baht/ha in year 2; 1,125 baht/ha in year 3 and 36,125 baht/ha in year
4, discounted with a 10% discount rate.d Profit at year 4 discounted with a 10% discount rate.1,000baht=32.9US$; 10rai=1.6ha. Data from 2008
Mean characteristics of sampled non-tree growers and tree growers for variables assessed in the quantitative survey, and significance of differences
Mean for Non-tree growers
n=171
Mean for Tree growers
n=461
P-value***p<0.01** p<0.05* p<0.10
Total land owned (rai) 19.5 29.5 ***Percentage of land owned with sandy soil 43% 45%Total income (baht/month) 9,890 10,395 *Off farm income as % of household income 38% 41%
Household on-farm labour available (number of persons) 2.1 2.0Smallholder age (years) 49.3 50.0Education (scale from 1 to 5) 2.3 2.2 *
Number of middle men known 4.8 2.8 ***
Knowledge about eucalypt tree farming (scale from 1 to 5) 2.0 2.5 ***Source: Boulay, Axelle. 2010. Contract tree farming and smallholders: Drivers of adoption in Thailand, PhD
Thesis, Australian National University, Australia.
Adoption is enhanced by: Availability and suitability of land Compatibility with past experiences, complexity, trialability,
observability, and stages of the innovation-decision process Perception of land tenure security but not influenced by holding a
formal land tenure document
Adoption ≠ land-use intensification strategy eucalypts = alternative crop for low productivity land, on which
eucalypts are the most profitable crop. = opportunity to diversify income + advantage of requiring low
labour inputs between planting and harvest. This is particularly advantageous for many tree growers who have off-farm income or rely on hired labour for farming their land.
Results:Drivers of adoption of contract tree farming
Mean characteristics of sampled independent tree growers and contract tree growers for variables assessed in the quantitative survey, and significance of differences
Mean for Independent TG n=169
Mean for Contract TG
n=292
P-value***p<0.01** p<0.05* p<0.10
Total land owned (rai) 28.5 30.3Percentage of sandy soil 49% 41% *Area planted with eucalypts (rai) 11.1 10.9Total income (baht/month) 10,315 10,475Eucalypts’ rotation planned (year) 3.7 4.0 ***Frequency of company’s visits (scale 1 to 3) 1.3 1.8 ***Trust in company for wood measurement 1-5 3.5 4.0 ***Experienced tree growers 55% 28% ***Growers who preferred the company’s plants 55% 97% ***Number of middle men known 4.4 1.8 ***Source: Boulay, Axelle. 2010. Contract tree farming and smallholders: Drivers of adoption in Thailand, PhD
Thesis, Australian National University, Australia.
Results:Drivers of adoption of contract tree farming
Conclusions:
The adoption of contracts for tree farming is enhanced by:
size of landholding (explained by economies of scale in adopting a contract)
previous experience with contract agriculture extension work conducted by contracting companies and especially
company change agents’ visits to the farms collection of information
There was no evidence that contracts increased profit made from tree growing
The use of a theoretical framework combining economic, diffusion of innovation and livelihood theories was successful.
The only factors that were not well predicted by this framework included the importance of the negative perceptions of eucalypts and the economies of scales in contracts.
Forestry companies should focus on extension in order to attract more smallholders to eucalypt tree farming.
Extension needs to be supported by applied research into eucalypt tree farming, such as in tree improvement, site selection, and soil management within the context of sustainable land use.
Governments could assist the realization of more sustainable outcomes by establishing programs which help smallholders assess and monitor the suitability of land for planting.
The provision of information and technical advice,,and some assistance for smallholders to organize themselves into associations, would facilitate contract tree farming.