Agricultural Contract Agreements as a Civil Law Instrument in Supporting Food Security and Farmers’ Welfare

Abstract

 This research addresses the critical problem of power imbalance in agricultural contractual relationships that undermines both farmers’ welfare and national food security in Indonesia. The study aims to analyze how agricultural contract agreements can function effectively as civil law instruments that simultaneously protect farmers’ interests and advance food security objectives. Using a mixed-method approach combining normative juridical analysis of legal frameworks with empirical investigation through semi-structured interviews with 25 stakeholders across three major agricultural provinces, the research examines contract formation processes, implementation dynamics, and dispute resolution mechanisms. Results indicate that agricultural contracts have significant potential to stabilize farmers’ income (showing an average 24% increase for contract farmers) and improve food availability indicators when properly structured. However, implementation remains challenged by information asymmetry, weak enforcement mechanisms, and farmers’ limited legal literacy. The study proposes a model contract framework incorporating transparent price determination mechanisms, proportional risk-sharing provisions, and accessible dispute resolution processes, underscoring the need for regulatory reforms that balance contractual freedom with protective measures for structurally vulnerable parties.