Sweet pepper was introduced in Thailand in 1999 by a Dutch
company. Because of climatic conditions, the northern upland
areas were the primary target regions, especially those near the
city of Chiang Mai, where infrastructure and market access conditions
were relatively favorable. In particular, the company chose
the Mae Sa watershed, where farmers were contracted to produce
red and green sweet pepper in greenhouses, using hydroponics
systems that make cultivation independent from soil quality conditions (Schipmann and Qaim, 2010). Sweet pepper cultivation
is labor and input intensive and associated with high capital
investments, since sophisticated greenhouses are required. Since
farms in the watershed are predominantly small-scale, with an
average farm size of 1.6 acres, the company initially provided credit,
private extension, and certain inputs to contracted farmers.