This paper explores the experience of contract farming between Garuda Food—represented locally by PT Bumi Mekar Tani—and peanut smallholders in West Nusa Tenggara. The research uses data gathered from a survey of 713 smallholders (contract and non-contract farmers) from 72 farmers groups in seven peanut growing districts, as well as semi-structured interviews with key stakeholders. Overall, the findings suggest that the contract farming has a positive effect on the peanut sector, improving contract farmer's incomes, generating employment, and improving the quality of conditions in the peanut sector, including price determination. The program has also increased farmer's access to credit, and strengthened social capital and learning between members. However, weaknesses in the program need to be addressed, including the unbalanced contractual relationship between firm and farmers, unclear risk management for farmers, and social impacts on labour and gender (peanuts used to be the domain of women). The paper provides useful insights on the actual experiences of contract farmers to complement existing research on the economic impacts of the model.

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