contract farming in gujarat panwar

CONTRACT FARMING IN GUJARAT - 1 –IIPM

CONTRACT FARMING IN GUJARAT

PLANTATION AND AGRI COMMODITY PRODUCTION

SECTION: - I

SUBMITED TO: -

Prof. K.Narendran

SUBMITTED BY: -

RAJENDRA SINGH PANWAR

(R08PGDM045)

INDIAN INSTITUTE OF PLANTATION MANAGEMENT

Jnana bharathi campus, malathalli post

Bangalore-560056




SECTION: - I

SUBMITED TO: -

Prof. K.Narendran

SUBMITTED BY: -


(R08PGDM045)



Bangalore-560056




SECTION: - I

SUBMITED TO: -

Prof. K.Narendran

SUBMITTED BY: -


(R08PGDM045)



Bangalore-560056


CONTENT

1. Acknowledgement. 4

2. Abstract. 5

3. Introduction. 6

4. Advantages and problems. 9

5. Key preconditions for successful contract farming . 10

6. Types of contract farming. 11

1. The centralized model. 11

2. The nucleus estate model. 12

3. The multipartite model. 12

4. The informal model. 13

5. The intermediary model. 14

7. Scheme for contract farming in Gujarat . 15

8. Gujarat firm to start contract farming of organic banana 17

9. Success story and prospective agreements of Contractfarming in Gujarat.

18

10. Conclusion. 19

11. Reference. 20


CONTENT


2. Abstract. 5

3. Introduction. 6












18

10. Conclusion. 19

11. Reference. 20


CONTENT


2. Abstract. 5

3. Introduction. 6












18

10. Conclusion. 19

11. Reference. 20


Acknowledgement

I have great pleasure in expressing my thank s to Dr.V.g.dhanakumar for theample opportunity for write synthesis paper on contract farming in Gujarat . Thiswill go a long way in improving and imparting knowledge and skills to studentsin Indian institute of plantation management. My performance in this directioncould not have been completed without his help and assistance.

I extent my sincere regards to all my classmates for their moral suppo rt andencouragement.

Sincerely,

Rajendra singh panwar


Acknowledgement



Sincerely,



Acknowledgement



Sincerely,



ABSTRACTThe structure of Indian agriculture underwent rapid changes during the nineties both due tothe pressure of commercialisation and increased dependence on trade. This was fuelled bymany overt and covert changes in the sector, but diversification of crops a long with theadvent of WTO and liberalisation policies were the main players in the structural change.One of the important bottlenecks, highlighted by many analysts of Indian agriculture refers tothe small size of holdings and the inability of the India n farmers to compete with the largescale farming of the West.

One of the ways to deal with small scale farm operation is to bring small and marginalholders (not holdings) together in a production system so as to deal with a particular product.In order to facilitate industries to procure specific quality of agro - commodity directly fromthe farmers the state govt, keeping in tune with the reforms of Model Act 2003, has adopted“Contract Farming " scheme from 31/3/2005.

While adopting contract farming, t he prime focus of the Gujarat government is two prongs,firstly farmers of Gujarat can get benefit of latest farming technology, improve quality andquantity of commodity, and get price security and an opportunity to diversify in other crops.On the other hand, processors can get quality and variety of commodity as per their marketrequirement at specific stable price.










INTRODUCTIONIn an age of market liberalization, globalization and expanding agribusiness, there is a danger thatsmall-scale farmers will find difficulty in fully participating in the market economy. In manycountries such farmers could become marginalized as larger farms become increasingly necessary fora profitable operation. A consequence of this will be a continuation of the drift of populations to urbanareas that is being witnessed almost everywhere.

.

What is Contract Farming

Contract farming is a written commitment or an agreement madebetween the farmer and the buyer for cultivation and sale ofspecific quality, quantity, grade, and variety of commodity atpredetermined price

Contract farming can be defined as an agreement between farmers and processing and/ormarketing firms for the production and supply of agricultural products under forwardagreements, frequently at predetermined prices. The arrangement also invariably involves thepurchaser in providing a degree of production support through, for example, the supply ofinputs and the provision of technical advice. The basis of such arrangements is a commitmenton the part of the farmer to provide a specific commodity in quantities and at quality standardsdetermined by the purchaser and a commitment on the part of the company to support thefarmer's production and to purchase the commodity .

Attempts by governments and development agencies to arrest this drift have tended to emphasize theidentification of "income generation" activities for rural people. Unfortunately there is relatively littleevidence that such attempts have borne fruit. Thi s is largely because the necessary backward andforward market linkages are rarely in place, i.e. rural farmers and small -scale entrepreneurs lack bothreliable and cost-efficient inputs such as extension advice, mechanization services, seeds, fertilizersand credit, and guaranteed and profitable markets for their output.

Well-organized contract farming does, however, provide such linkages, and would appear to offer animportant way in which smaller producers can farm in a commercial manner. Similarly, it alsoprovides investors with the opportunity to guarantee a reliable source of supply, from the perspectivesof both quantity and quality.



.








.







The contracting of crops has existed fromtime immemorial. In ancient Greece the practice was widespread, with spe cified percentages ofparticular crops being a means of paying tithes, rents and debts . During the first century, China alsorecorded various forms of sharecropping. In the United States as recently as the end of the nineteenthcentury, sharecropping agreements allowed for between one-third and one-half of the crop to bededucted for rent payment to the landowner.

These practices were, of course, a form of serfdom and usually promoted permanent farmerindebtedness. In the first decades of the twentieth cen tury, formal farmer-corporate agreements wereestablished in colonies controlled by European powers. For example, at Gezira in central Sudan,farmers were contracted to grow cotton as part of a larger land tenancy agreement.

This project served as a model from which many smallholder contract farming projects subsequentlyevolvedThe intensity of the contractual arrangement varies according to the depth and complexity ofthe provisions in each of the following three areas: -

Market provision: The grower and buyer agree to terms and conditions for the future sale andpurchase of a crop or livestock product;

Resource provision: In conjunction with the marketing arrangements the buyer agrees tosupply selected inputs, including on occasions land preparation and technical advice;

Management specifications: The grower agrees to follow recommended production methods,inputs regimes, and cultivation and harvesting specifications.

From the point of view of farmers, contractual arrangements can provide them with access toproduction services and credit as well as knowledge of new technology. Pricing arrangements canreduce risk and uncertainty. Some contract farming ventures give farmers the opportunity to diversifyinto new crops, which would not be possible without the process ing and/or marketing facilitiesprovided by the company. Offsetting these benefits, however, ar e the risks associated with thecultivation of a new crop, the fact that the company may fail to honour its commitments and thedanger of indebtedness if problems arise.

From the point of view of the sponsoring companies, contract farming may in many cases be moreefficient than plantation production, and will certainly be more politically acceptable. It can give themaccess to land that would not otherwise be available and the opportunity to organize a reliable supplyof products of the desired quality, which probably could not be obtained on the open market. On theother hand, from the companies' perspective contract farming is not without difficulties. On occasion




















farmers may sell their outputs to outsiders, even though they were produced using company -suppliedinputs. Conflicts can also arise because the rigid farming calendar required under the contract ofteninterferes with social and cultural obligations.






Advantages and problems

Contract farming has significant benefits for both the farmers and sponsors (investors). However,with these advantages also come problems. This chapter considers both advantages and problemsfrom the standpoint of farmer and sponsor.

FARMERS

Advantages for farmers

Inputs and production services are often supplied by the sponsor . This is usually done on credit through advances from the sponsor . Contract farming often introduces new technology . Farmers' price risk is often reduced as many contracts specify prices in advance . Contract farming can open up new markets which would otherwise be unavailable to small

farmers.

Problems faced by farmers

Farmers face the risks of both market failure and production problems. Inefficient management or marketing problems can mean that quotas are manipulated so

that not all contracted production is purchased . Sponsoring companies may be unreliable or exploit a monop oly position. The staff of sponsoring organizations may be corrupt, particularly in the allocation of quotas . Farmers may become indebted because of production problems and excessive advances .

SPONSORS

Advantages for sponsors

Contract farming with small farmers is more politically acceptable than, for example,production on estates.

Working with small farmers overcomes land constraints . Production is more reliable than open -market purchases and the sponsoring company faces

less risk by not being responsible for production. More consistent quality can be obtained than if purchases were made on the open market .

Problems faced by sponsors

Contracted farmers may face land constraints due to a lack of security of tenure . Social and cultural constraints may affect farmers' ability to produce to managers'

specifications. Poor management and lack of consultation with farmers may lead to farmer discontent . Farmers may sell outside the contract (extra -contractual marketing) thereby reducing

processing factory throughput. Farmers may divert inputs supplied on credit to other purposes, thereby reducing yields .




FARMERS



farmers.




SPONSORS












FARMERS



farmers.




SPONSORS










Key preconditions for successful contractfarming

No contract farming venture should be initiated unless some basic preconditions are met.This chapter reviews these preconditions under the headings of profitability, the physical and socialenvironments and government support.

A PROFITABLE MARKET

The sponsor

Must have identified a market for the planned production . Must be sure that such a market can be supplied profitably on a long-term basis.

The farmer

Must find potential returns more attractive than returns from alternative activities and mustfind the level of risk acceptable.

Must have potential returns demonstrated on the basis of realistic yield estimates.

THE PHYSICAL AND SOCIAL ENVIRONMENTS

Main factors

The physical environment must be suitable in general and in particular for the product to beproduced.

Utilities and communications must be suitable for both farming, e.g. feeder roads, and foragro-processing, e.g. water and electricity .

Land availability and tenure contracted farmers require unrestricted access to the land theyfarm.

Input availability sources of inputs need to be assured . Social considerations cultural attitudes and practices should not conflict with farmers'

obligations under the contract and managers must develop a full understanding of localpractices.

GOVERNMENT SUPPORT

The enabling and regulatory role

Suitable laws of contract and other laws are required as well as an efficient legal system. Governments need to be aware of the possible unintended consequences of regulations and

should avoid the tendency to over regulate. Governments should provide services such as research and, sometimes, extension .

The developmental role

Governments can take steps to bring together agribusiness and suitable farmers .




A PROFITABLE MARKET

The sponsor


The farmer

Must find potential returns more attractive than returns from alternative activities and mustfind the level of risk acceptable .



Main factors






GOVERNMENT SUPPORT









A PROFITABLE MARKET

The sponsor


The farmer

Must find potential returns more attractive than returns from alternative activities and mustfind the level of risk acceptable .



Main factors






GOVERNMENT SUPPORT







Types of contract farming

Contract farming can be structured in a variety of ways depending on the crop, the objectives andresources of the sponsor and the experience of the farmers. Contracting out production is acommercial decision to facilitate an adequate supply within a designated period and at an economicprice. Any crop or livestock product can theoretically be contracted out using any of the models;however, certain products favour specific approaches . Broadly speaking, contract farmingarrangements fall into one of five models:

1. The centralized model.2. The nucleus estate model.3. The multipartite model.4. The informal model.5. The intermediary model.

THE CENTRALIZED MODEL

This is a vertically coordinated model where the sponsor purchases the crop from farmers andprocesses or packages and markets the product. Except in a limited number of cases, farmer quotasare normally distributed at the beginning of each growi ng season and quality is tightly controlled. Asponsor may purchase from tens of thousands of small -scale farmers within a single project. Thecentralized scheme is generally associated with tobacco, cotton, sugar cane and bananas and with treecrops such as coffee, tea, cocoa and rubber, but can also be used for poultry, pork and dairyproduction. Where fresh vegetables and fruits are grown under contract, the term "processing" mayinclude grading, sorting and packaging as well as the provision of cool sto rage facilities.

In Africa, the contracting out of crops to farmers under centralized structures is common. These areoften called "out grower" schemes. For example, in Zambia the multinational corporation, Lonhro,
















considered the system preferable to gro wing cotton on a plantation basis. In the late 1980s it initiateda smallholder project where over 15 000 farmers grew cotton under contract for the company'sginnery. The level of involvement of the sponsor in production can vary from a minimum where,perhaps, only the correct type of seed is provided, to the opposite extreme where the companyprovides land preparation, seedlings, agrochemicals and even harvesting services. The extent of thesponsor's involvement in production is rarely fixed and may depen d on its requirements at a particulartime or its financial circumstances. In India, a tomato processing factory in the Punjab was transferredin 1997 from one multinational company to another.

The previous owners had supplied seed, supervised production and harvesting operations andprovided technical advice when needed, but the new owners only provided seeds. In the Philippines, avegetable canning company operating close to Manila decided to cease advancing fertilizer andchemicals to its contract farmers because these were being diverted to other crops and farmers werealso making extra-contractual sales. The company changed to a policy of supplying only seeds unlessit was convinced of the farmer's honesty

THE NUCLEUS ESTATE MODEL

Nucleus estates are a variation of the centralized model. In this case the sponsor of the project alsoowns and manages an estate plantation, which is usually close to the processing plant. The estate isoften fairly large in order to provide some guarantee of throughput for t he plant, but on occasion it canbe relatively small, primarily serving as a trial and demonstration farm.

The British-based Commonwealth Development Corporation (CDC) was a pioneer of the nucleusestate model although it no longer develops such estates. A common approach is for the sponsors tocommence with a pilot estate then, after a trial period, introduce to farmers (sometimes called"satellite" growers) the technology and management techniques of the particular crop.

Nucleus estates have often been used in connection with resettlement or transmigration schemes,such as in Indonesia and Papua New Guinea, for oil palm and other crops. While mainly used for treecrops, there are examples of the nucleus estate concept with other products. Indonesia, for example,has seen the operation of dairy nucleus estates, with the central estate being primarily used for therearing of "parent stock".

THE MULTIPARTITE MODEL

The multipartite model usually involves statutory bodies and private companies jointly participatingwith farmers. Multipartite contract farming may have separate organizations responsible fo r creditprovision, production, processing, marketing and management.

In Mexico, Kenya, and West Africa, among other countries, governments have active ly invested incontract farming through joint ventures with the private sector. Multipartite structures are common inChina where government departments as well as township committees and, at times, foreigncompanies have jointly entered into contracts wit h village committees and, since the early 1980s,individual farmers.






















There were formal contracts between the joint venture and the branches, and written contractsbetween the counties and the village committees, but only a verbal understanding between fa rmersand their respective committees.

In theory, farmers were expected to carry out cultivation as specified by the joint venture. In practice,however, county officials only followed instructions from the joint venture if to do so was in thecounty branch's immediate economic interest, irrespective of quality standards and long -termproduction objectives. The lack of coordination between the joint venture and the countymanagement, village cadres and farmers eventually resulted in the collapse of the ven ture.

THE INFORMAL MODEL

This model applies to individual entrepreneurs or small companies who normally make simple,informal production contracts with farmers on a seasonal basis, particularly for crops such as freshvegetables, watermelons and tropical f ruits. Crops usually require only a minimal amount ofprocessing. Material inputs are often restricted to the provision of seeds and basic fertilizers, withtechnical advice limited to grading and quality control matters.

A common example of the informal m odel is where the sponsor, after purchasing the crop, simplygrades and packages it for resale to the retail trade. Supermarkets frequently purchase fresh producethrough individual developers and, in some cases, directly from farmers. Financial investment by such




THE INFORMAL MODEL






THE INFORMAL MODEL




developers is usually minimal. This is the most transient and speculative of all contract farmingmodels, with a risk of default by both the promoter and the farmer

The success of informal initiatives depends on the availability of supporting serv ices, which, in mostcases, are likely to be provided by government agencies. For example, while companies following thecentralized model will probably employ their own extension staff, individual developers usually haveto depend on government extension services.

In addition, individual developers often have limited funds to finance inputs for farmers and thereforemay have to develop arrangements whereby financial institutions provide loans to farmers against thesecurity of an agreement with the develo per (an informal multipartite arrangement).

Furthermore, while nucleus estates and centralized developers frequently purchase products for whichthere is no other market (oil palm, tea and sugar, which depend on the availability of nearbyprocessing facilities, or fruits and vegetables for export), individual developers often purchase cropsfor which there are numerous other market outlets. It is therefore important that agreements reachedbetween the developers and farmers are backed up by law even if, in many countries, the slownessand inefficiency of the legal system make the threat of legal action over small sums a rather emptyone.

THE INTERMEDIARY MODEL

Throughout Southeast Asia the formal subcontracting of crops to intermediaries is a common practi ce.In Thailand, for example, large food processing companies and fresh vegetable entrepreneurspurchase crops from individual "collectors" or from farmer committees, who have their own informalarrangements with farmers. In Indonesia, this practice is wid espread and is termed plasma.

The use of intermediaries must always be approached with caution because of the danger of sponsorslosing control over production and over prices paid to farmers by middlemen. In addition, thetechnical policies and management inputs of the sponsors can become diluted and production datadistorted. In short, subcontracting disconnects the direct link between the sponsor and farmer. Thiscan result in lower income for the farmer, poorer quality standards and irregular production .


















Scheme for contract farming in Gujarat

An efficient agricultural marketing is essential for the development of the agriculture sector as itprovides outlets and incentives for increased production. An efficient marketing system contributesgreatly to the commercialization of subsistence farmers. Worldwide Governments have recognizedthe importance of liberalized agriculture markets.

The task Force on Agricultural Marketing Reforms set up by the Ministry of Agriculture & Co-Operation had suggested promotion of new and competitive Agricultural Market in private andcooperative sectors to encourage

a) Direct marketing and contract farming programmes

b) Facilitate industries and large trading companies to undertake procurem ent of agriculturalcommodities directly from the farmer's fields.

c) To establish effective linkages between the farm production and retail chains. There is therefore aneed to integrate farm production with national and international markets to ena ble farmers toundertake market driven production plan and adoption of modern marketing practices.

The Government of India has adopted the recommendations of the Task Force and has made severalsuggestions to the State Government, especially with regard to agricultural markets. A mode lAgreement for contract farming has been circulated to states. The State Government has consideredthe Model Agreement the rates of cess levied by the Agricultural Produce Marketing Committees inGujarat are much lower than in other states. Further, in contract farming, APMCs have a useful role toplay to facilitate transaction on sides , viz. contract sponsor and the fanners. The APMCs have a longstanding relationship with fanners in the area Therefo re they can play a facilitative role in mobilizingfarmers for the purpose of the contract, make them understand the concept, explain clauses of theagreement and monitor arrangements for supervised production. It is felt that all t he three players, e.g.contract sponsor, producers and the APMCs need each other in successful contracting. It is therefor efelt that at least initially; a three way agreement may be a workable platform for contract fanning.

Resolution

In view above, state government introduces a scheme for contract fanning in Gujarat on the same linesas suggested by Government Indian but with some modifications to suit local needs. The followi ngare the main features of the scheme.

1) The Scheme will be known as 'Contract Farming in Gujarat'.

2) If will apply within the state of Guja rat with effect from 31/3/2005.

3) A contract sponsor, mat is any person who wishes to buy agricultural present or future producedirectly from farmers, may conclude an agreement in the model format annexed to th is G.R asAnnexure I. It is not necessary to adopt it word by word but it should be as close as possible.









Resolution













Resolution






4) This agreement shall be called a Tripartite Agreement as there will be three parties viz. farmer,contract sponsor and APMC.

5) Such agreement may be for seasonal, annual or long term i.e. 3 to 5 years.

6) The APMC concerned shall play the role of a facilitator' for both the farmers and the contractsponsor.

7) Contract agreement shall cover description of farm survey numbers, specification of farm produce,specification of quality, specificat ion commodity contracted, crop delivery a rrangement, insurancecoverage, etc. as well details of payment to be made to formers and the APMC.

8) The tripartite agreement shall be registered with the M.D. Gujarat Sta te Agriculture MarketingBoard, Gandhinagar within a period of seven days. The Board shall examine th e agreement andensure that the interests of farmers are protected and, if, in the opinion of the Board, su ch anagreement shall result in exploitation of fanners or otherwise detrimental to the in terests of thefanners, the Board may refuse to register the agreement The M.D. shall take a decision regardingregistration (whether to register or to refuse registration) within a period of seven days from the dateof submission of the agreement, provided that a decision to refuse registration shall not be takenwithout giving opportunity of hearing all the parties to the agreement or any other party whoseinterest will be affected by the agreement.

9) The Tripartite Agreement shall be registered in the o ffice of the Gujarat State AgricultureMarketing Board, Gandhinagar.

10) The Board may charge Rs.200/ - (Rupees two hundred) from the contract sponsor as registrationfee.

11) Any dispute arising out the agreement shall be referred to the Managing Dire ctor, Gujarat StateAgriculture Marketing Board for arbitration. The Managing Director shall act as the Ar bitratorbetween the contracted parties. The Arbitrator shall decide the dispute after observing principles ofnatural justice preferably within a month from the date of the dispute lodged with his office.

12) The contract sponsor shall pay the prescribed cess to the APMC concerned.

13) If a contract covers the geographical areas of more than one APMCs, the co ntract sponsor shallregister a separate contract with each one of them unless the APMC conc erned select a commonAPMC from amongst them to represent them with a legal instrument.

14) If an agreement covers fanners from more than one market area, in such cases, the contractsponsor may pay market cess to the Gujarat State Agriculture Marketing Board; Gandhinagar which,in turn, shall apportion the said cess among the APMCs concerned provided APMCs concerned agreeto this facilitation of contract sponsor.


























Gujarat firm to start contract farming

of organic banana

After emerging as the first Indian farming company to export bananas from India, Navsari -basedDesai fruits and vegetables (DFV) now plans to bank on ‘organic bananas'. Considering the hugedemand for organic bananas in the overseas countri es, DFV has set the ball rolling to grow organicbananas of export quality in Gujarat.

As part of the pilot project, the company has already identified 80 acres of land for carrying out thefield trials. DFV has entered into contract farming agreements wi th farmers to get 80 acres of land.The company will soon kick off the trials. "The export potential for bananas grown without using anyfertilisers and pesticides is huge in the global markets. We are planning to grow organic bananas forthe first time," said Ajit Desai, chairman of Desai Fruits and Vegetables.

After the trial runs, the company will cultivate organic bananas in a big way. The company is mainlyinto contract farming business and it brought 240 acres of land under banana crop in FY07, whichincreased to 720 acres in 2007-08. With thousands of farmers making a beeline to be a part of DFV,the company plans to increase the acreage to 6,500 acres in 2008 -09. However, it will take some timebefore the company actually starts growing organic bana nas on commercial basis.

"It takes a couple of months to make land chemical free. We have to spend great deal of time incleaning up chemicals from the land to grow organic food. It will at least take two years for thecompany to kick off organic bananas on large scale," said Pankaj Khandelwal, CEO, DFV, whichapart from bananas also exports mango, pomegranate, grapes and other vegetables.

"Perhaps it will be the first instance of contract farming of organic bananas by any company inGujarat," he added. So far, the company has exported 50 banana containers weighing 18 tonnesmainly to Middle East. However, all these containers were sent on trial basis. Recently, the companyflagged-off its 51st container of bananas, which the company termed as its first co ntainer oncommercial basis.

Switzerland-based Contract Farming India AG holds a controlling stake of 84 per cent in thecompany. DFV exports fruits to Japan, US, UK and Europe also. The company has also chalked outRs 80 crore of investment for its futur e expansion. The majority of proposed investment would go forinfrastructure and research and development (R&D) activities. DFV has also inked a memorandum ofunderstanding (MoU) with state -run Gujarat agro industries corporation (GAIC) to set upinfrastructure for export of fruits and vegetables



of organic banana









of organic banana








success story and prospective agreements of

Contract farming in Gujarat

At present among successful contract farming practices undertaken in Gujarat,

Agro cell Corporation Ltd. is doing contract farming of organic cotton and sesameseeds covering about 5000 acres in Kutch and Surendranagar district of Gujarat sincelast 8 years. The farmers get 7-8 % more price than ordinary cotton in current marketand concession in certain services from the company.

Atreyas Agro Organic Pvt. Ltd. Plans to grow Jetrophs Curcas by contract farming.They have target of covering more than 50,000 acres of irrigated & non -irrigated land ofGujarat.

Godrej Agro vat Ltd. Is also planning to grow high quality oil palm under contractfarming in south Gujarat region by providing imported tissue culture plants and farmingtechnology to the contract farmers.

Pepsi India, Arvind mills, Jojoba Oil Industries Ltd., are some companies who haveapproached the govt. and shown keen interest in doing research and contract farming inAgro-products in Gujarat under their backward integration projects.


















CONCLUSION

The wide variety in existing CF arrangement & their varied success in benefitting smallholder & agribusiness demonstrate that these arrangements are complex and that theirperformance and potential benefits are highly sensitive to specific features of the products.

With the emergence of the free market economy i n the wake of liberalisation. Globalisation,privatisation and the fast expansion of agri -business, small farmers may find it difficult tocope up with the resultant volatility in the economy. They tend to be marginalised andmigration from rural to urban areas is increasing alarmingly all over the country. As a result,consolidation of holdings is increasingly becoming the need of the day. One of the strongreasons could be the lack of well -established forward and backward linkages, such asextension advice, mechanisation services, supply of seeds, fertilisers and credit, as alsoguaranteed and profitable markets for their produce. Therefore, the need of the hour is tomitigate the difficulties in the contract farming system, which would hopefully popularis e itfurther among small farmers.

The agreements between the farmer and the firm provides for the purchaser to extend adegree of production support through inputs and technical guidance for crop cultivation.There is a commitment from the farmer’s side to produce the specified agricultural productsby conforming to the quality and quantity prescribed by the purchaser, and the firm supports,in turn, the farmer’s production, and also purchases the produce.

Contract farming has long-term benefits for both the grower and the purchaser, provided thattheir long-term association is mutually complementary. A sizable part of the farmingcommunity falls under the small and marginal category in India. Contract farming, as itexisted then was different from the de sign and functioning of contract farming method today.


CONCLUSION






CONCLUSION






Reference:-

www.mst.wur.co.in www.fao.org.com www.esocialsciences.com www.scidev.net Contract Farming and New Dimensions of Indian Agrarian Structure....

Dr. Joshi. Contract farming: Joining hands for mutual gains by K.N. Rai .


Reference:-




Reference:-



contract farming in gujarat panwar

Documents