When the policy environment is conducive. In particular, this is the case in regions with a favourable investment climate, limited regulations on direct transactions between companies and farms, well defined grades and standards and the presence of farmer organisations that link farmers and firms. The participating firms are selected on the basis of criteria including capacity to provide technology and training, and receive preferential treatment such as government loans and access to land (Lohmar et al., Nevertheless, by examining farmer surveys from villages mostly in Zhejiang, Jiangxi and Shandong provinces, Guo and Jolly (2009) conclude that the proportion of households engaged in contract farming is relatively low and well below the proportion willing to produce under contract, owing to an absence of opportunities.