Agent-based simulation of contract rice farming in the Mekong Delta, Vietnam

Abstract

We present a contract farming model in the context of rice supply chain in the Mekong Delta, Vietnam, with the use of agent-based simulation. The purpose of the simulation is to understand the motivation of farmers and contractors in their participation into the contract rice farming scheme. The decision-making process is based on two main factors: cost-benefit analysis and the role of trust. The context is also extended with the introduction of a spot market in which both parties can renege on the contractual relationship. The simulation model then evaluates the performance of contract farming under different commitment decisions of farmers and contractors.