Contract farming under the centralized processing and marketing
model is common throughout the Thai sugar industry. Forty-six
individually owned sugar mills in the country produced 4 080 000
tonnes of sugar in the 1997/1998 season, of which 57 percent was
exported. Over 200 000 farmers grow sugar cane for these mills, on
approximately 914 000 hectares. There are also many farmers who
grow crops for large-scale farmers through agreements with
intermediaries. In theory, the Thai Government closely regulates prices,
issues quotas and monitors the operations of the private sugar-milling
companies. The Government has introduced a net revenue sharing
system under which growers receive 70 percent and the millers 30
percent of total net revenue. The Government also promotes and
manages technical research centres and encourages growers’
associations.18
speaking, contract farming arrangements fall into one of five models: