Legal aspects of contract farming under the Thai Contract Farming Promotion and Development Act B.E. 2560 (2017)

The formerly conservative agricultural industry in Thailand is increasingly shifting towards an agro-industrial industry to increase the efficiency of producing goods. Many agricultural business operators and farmers have legal agreements on contract farming, however, the structure of these tend to be unequal and unfair against farmers. The lack of a legal framework that factors the development of contract farming is often the cause of exploitation in contracting. This issue is especially prominent in countries that follow central planning policies and that have market liberalization by market closure and therefore significant changes in consumer behavior where the current law is not giving enough flexibility to react to the changed circumstances. The rise of fast-food restaurants, the increased presence of supermarkets and continued expansion of fresh and processed products are all examples of contributing factors. This thesis aims for a solution to prevent unfair practices in a contract farming agreement underlying the Contract Farming Promotion and Development Act of 2017, which is the first specified law for contract farming in Thailand. This law was implemented to build fair deals in good faith for contract farming between the parties. Along with the study of a legal framework on the current agricultural law in Thailand, we will look at developed countries like the United States and the laws of the United Kingdom who are more protective of the partners of agricultural agreements.Contract Farming is currently an important part of the international economic sector. In Thailand, it began in 1987 with no specific legislation to support and enforce farm agreements. The laws related to contract farming were the Thai Civil and Commercial Code under section 587 Hire of work. The Unfair Contract Terms Act, and the regulations of the Ministry of Agriculture and Cooperatives. On September 23rd 2017, the government promulgated the act on Contract Farming to promote agricultural development in Thailand. This act focuses on protecting both contracting parties by the rules of contract and features an option to mediate disputes before going to court. Furthermore, the law aims to promote and develop contracting to ensure sustainability for the agricultural protection of parties in the agreement and reduces overall conflicts between contractors. The government attempts to deter this to rather focus on balancing the development and outcome of a contract and identifying revenue-generating activities for farmers. Agricultural business operators and farmers often lack efficient and reliable inputs such as providing advice on extending machinery, seeds, services, and credit, as well as guarantees for generated profit and marketing to enhance productivity. It also allows the agricultural business operator to secure reliable sources of supply both from quantity and quality.The research in this paper discovers that the act on Contract Farming still a structure to prevent these issues. There is no standard framework or formulation to limit and regulate the contractual outline. The act would cause diversity and complexity in an agricultural production contract. This would lead agricultural business operators to take advantage by exploiting farmers.