Abstract:
Purpose: The theme of eff ects of contract farming on income of farmers has been strongly debated by
scholars in recent years, especially in developing countries. This article attempts to investigate the
infl uence of contract farming on the income of farmers in tea production in Phu Tho province of Vietnam.
Research Method: Primary data for the study is gathered by a cross-sectional survey on 358 tea
farmers in fi ve districts of Phu Tho province between March and June 2016. Propensity score matching
is employed to assess eff ects of contract participation on income of tea farmers in Phu Tho province,
Vietnam.
Findings: Our results suggest that contract farming can have a minor positive impact on farmers’
incomes. The average income of contracted farmers is found to be higher than that of their counterparts
by about US$720 per year. Due to this small diff erence of income, contract farming plays an important
role in procuring leaf tea, stabilising prices of leaf tea and generating employment rather than enhancing
income for tea farmers.
Originality/value: The research contributes to the empirical work by providing an evidence on infl uences
of contract farming on income of tea farmers as well as re-examining the importance of contract farming
to improving livelihood of tea farmers in Phu Tho province, Vietnam.
