Abstract
The objectives of the study were (a) to examine the perception of chili growers toward contract farming (CF) and (b) to ascertain the factors that motivate the growers to participate in CF. A total of 190 chili growers within East Coast Economic Region (ECER) were interviewed. The data were analyzed using SPSS to describe the respondents' profile and CF practices. At the present moment, the chili growers have a contract agreement with the Farmers' Organization Authority of Malaysia (FOAM) and FOAM, in turn, has a contract agreement with Nestle. Factor analysis was carried out to identify latent factors that influenced chili growers in their participation in CF. These factors are extension services, access to new markets, market assurance, protection for growers, skills transfer, and indirect benefits.
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