Advancing Malay small scale farmers through contract farming – Perception and evaluation of project participants and local communities

Malaysia’s third National Agriculture Policies (NAP 3, 1998-2010) stipulates Contract Farming (CF) as a high impact programme that will spearhead advanced commercialisation of small scale farming while revamping the rather anaemic agrofood production in the country. This paper presents the findings of a recent study on what 207 Malay participants of CF projects organised by the Federal Agricultural Marketing Authority (FAMA) and 200 respondents of the surrounding Malay local communities in northern Peninsular Malaysia thought of the CF programme. It was found that (1) the number of active participants who consistently delivered produce to FAMA fell below that of the total number of the project participants i.e. at 65.7 per cent; (2) significantly, 51.2% of the CF project participants felt trapped by FAMA’s statically low pricing, especially in the wake of ever rising maintenance costs; (3) participants generally were not able to comply with FAMA’s strict rulings with regard to the quality and quantity of produces to be delivered, which in fact was reflective of the shortcomings on the part of government agencies’ extension services themselves; and (4) a large majority (65%) of the local communities expressed their non-regrets about not participating in the FAMA’s CF projects at all as they were not convinced that doing so would dramatically increase their income. It may be concluded, therefore, that the FAMA’s CF programme has had very limited success and as such could not be regarded as an effective mechanism to further develop Malay small scale farmers.