THE NATIONAL Legislative Assembly (NLA) yesterday overwhelmingly backed the first draft of a proposed bill that would legalise contract farming.
Agriculture and Cooperatives Minister General Chatchai Sarikulya said the bill would protect farmers against conglomerates and ensure fairness in contract farming, which would improve the country’s economy in the long term.
However, some NLA members pointed out that the bill still had legal gaps that would need to be addressed before it is forwarded to the Cabinet.
“Right now contract farming is widespread … and if we support contract farming with a law to |regulate the system to have more fairness and align with international standards, it will increase our potential, make our agriculture more sustainable and give farmers financial stability,” Chatchai said.
“This bill will protect farmers from unfair contracts and help them to gain more negotiating power over agricultural conglomerates.”
He said a contract farming law was needed because farmers always had less power in negotiations and were in an unfavourable position when dealing with complicated contracts with big investors.
The bill will require companies that want to engage in contract farming to register with the Agriculture and Cooperatives Ministry’s Office of the Permanent Secretary and publicly disclose their operations.
Also, before a contract is signed with farmers, the companies will have to present a prospectus to farmers informing them of the details and benefits of the agreement.
According to the new bill, the definition of a contract farming system is an agreement between an agricultural business operator with more than 10 farmers and a registered agricultural organisation.
The bill was approved by the NLA, with 202 members voting in favour with no objections and three abstentions.
Some members voiced concerns, however. Thanee On la-iad commented that even though the bill was based on a good principle to protect farmers, the definition of the contract farming system – a contract with more than 10 farmers – could open a legal gap allowing agricultural business operators to sign contracts with groups of less than 10 farmers to avoid complying with the law.

Unfair contracts
Woraphon Sokhatiyanurak, another NLA member, said |the prospectus for farmers might not be sufficient to ensure the |fairness of contracts.
He suggested that there should an official registration process to protect farmers and the contract should specify the owner of the intellectual property that could be created during the course of the contract.
In a related event, Srisuwan Janya, secretary-general of Association for the Protection of the Thai Constitution, asked the Ombudsmen to investigate officers who offered benefit to agricultural business operatiors that were involved in unfair farming contracts with farmers.
He said the issue concerned the Agriculture and Cooperatives Ministry’s cooperation with a big agricultural conglomerate to replace dry-season rice farming with maize.
Srisuwan said the contract required farmers to buy seed only from companies that participated in the programme. The seed was then sold at very high prices.
He said the policy was unfair to farmers and asked the Ombudsmen to investigate, adding that the government should strictly regulate contract farming or abolish the system for good.