Does Contract Farming Improve Farmers’ Income? The Case of Pineapple Farmers in Nong Khai and Loei, Thailand

This study examines the effect of contract farming on pineapple farmers’ income in Nong Khai and Loei, Thailand through three regularized regression models. It is a cross-sectional study conducted on 106 pineapple growers in these two Northeastern Thai Provinces. The regression performances of the three methods namely Ridge, Lasso, and Elastic net were compared using the measures of the lowest RMSE and the highest R-square; and Lasso was found to outperform the other two methods. The estimation results from Lasso indicate that participation in contract farming is not sufficient to improve the farming household income. The number of household labors, the extent of farmland occupied by farmer, household expenditure, and household debt have positive association with income while renting-in agricultural land has a negative effect on income.