Working With Big Companies

[JurgenG]

A neighbour has just signed a contract with The Mall group I believe to grow coffee in his land. He also told me that if I don't like growing coffee there are other alternative with the same group.

I'm just the caretaker of a land that belongs to a friend who moved back home a couple of years ago. He asked me the pro and con of working as a subcontractor for such a big company. The first things that came to my mind is, pro : you don't have to worry to find a buyer, you have access to good quality seeds and advises. Con : it's someone else who control what you are doing, you don't have the alternative to look for other buyers if you're not happy with the price offered by the company you're working for. You may also be locked by the contract for a long period of time.

Does anybody here have experience to work with big companies (The Mall, Saha, ...)? What are your advises ?

[Monkeypants]

I have a contract with Saha Farms to produce chicken.

We have a signed contract with an agreed price.

The contract in our case can be cancelled by either party, at anytime.

It is a good thing for me, although as you have already pointed out, you are effectively working for the company

Plus points......you don't need to find a market, and you have an agreed price. Win win,

Edited September 1, 2012 by Monkeypants

[RedBullHorn]

I'll be signing a contract with a feed company next year when i expand my catfish farm operations from 200'000 fingerlings to 500'000 fingerlings... It is a 40/60 venture with me paying 40% of the season's batch and the rest of the 60% on credit with the feed company, They will also handle the harvest and they guarantee their product's FCR, anything lower than the guarantee FCR, the company will fix the different in monetary term... Farmgate price is also agreed in the form of "Insured" price or higher but will not be lower than the insured price... That the pro and for the con, the feed price is mark up by another 5 %, i'd say is a fair term...

I've done some other contract farming before in the past, like piggeries, i just pay for the piglets and the company handle the feed... Those projects turn out very well too...

Villagers in my vicinity are also heavily contracted for maize plantation and all of them are having a prosperous livelihood...

Edited September 1, 2012 by RedBullHorn

[somo]

I have a contract with Saha Farms to produce chicken.

We have a signed contract with an agreed price.

The contract in our case can be cancelled by either party, at anytime.

It is a good thing for me, although as you have already pointed out, you are effectively working for the company

Plus points......you don't need to find a market, and you have an agreed price. Win win,

Sounds like a pretty standard Thai contract. Anyone can break it anytime with no penalties

[Michael Hare]

I run a small grass seed business. My major problem is that many farmers don't honour the contract. Sign contract in March, we give out free nursery seed and in May they plant cassava because the price is going to be 3 baht/kg. Of course they end up getting about 2.40-2.60 baht/kg for their cassava which means they get about 50% less than if they had planted my grass seed crops. Cap in hand they then ask for a grass seed contract next year. Which I won't give to them because they are not trustworthy. We are here for the next 30 years or more with guaranteed prices, free nursery seed and fertiliser in advance which we deduct the price of at seed purchase. Beats cassava any day.