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

Abstract

This article aims for a solution to prevent unfair practices in a contract farming agreement underlying the Contract Farming Promotion and Development Act B.E. 2560 (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 agricultural business and farmers. 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 parties 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[1], The Unfair Contract Terms Act[2], and the Regulations of the Ministry of Agriculture and Cooperatives.

The research in this paper discovers that the act on contract farming still needs improvements, to prevent unfair agriculture agreements between the parties.  There is no standard framework or formulation to limit and regulate the contractual outline. The current act and the diversity and complexity in the agricultural production contracts leads to agricultural business operators taking advantage by exploiting farmers.