Contract Farming through Tea-Horticulture Intercropping System: A Case Study of Gambung Estate and Horticultural Farmers in Bandung, Indonesia

Contract farming is becoming a viable form of partnership between tea plantation companies and local farmers in the management of tea plantations. This study aimed to: (1) describe a contract farming pattern through the system of intercropping tea-horticulture, (2) analyze the efficiency of the management of tea garden with contract farming, and (3) describe the benefits and sustainability of the contract farming between Gambung Estate and horticultural farmers. The case study was conducted in Gambung Estate using qualitative descriptive analysis and contract farming scheme analysis. The study observed that the contract farming patterns applied was a modified nucleus estate model with a combination of resource provisioning cooperation with production management cooperation. The challenges for future contract farming include land management, new skill transfer, climate change, and shared risk and effort between the two parties so that the bargaining position of horticultural farmers will be increased in the sustainable tea plantation management framework. Value of investment efficiency was 47 percent for new planting and 49 percent for replanting. The highest R/C and B/C values were given to the intercropping system of tea-chili at 2:25 and 1:25, respectively.