1

CONTRACT FARMING IN INDIA

By: Harveer Singhtwitter.com/iastoss+91-880-2009-420

This PPT is for educational purpose only. The learner is expected to supplement the video lecture with this ppt. The content is taken from various daily and weekly publications. Due care has been taken in preparing the material but the tutor or superprofs would not be responsible for any error or consequences arising out of it.

CONTRACT FARMING IN INDIA

• It is an institutional arrangement between the Farm and firm to produce and transact agri-commodities on predetermined terms.

• It provides insurance against price fluctuation as well as against the prospect of not finding a buyer.

• In Poultry if contracted, 88% of the risk transfers to the firm.

• Three acts that are Essential Commodities Act, APMC Act and Land Ceiling Act severely circumscribed the private sector participation.

Faculty: Harveer Singh2

• With LPG in 1991; Indian Agriculture saw these changes:– Export orientation demanded better quality and traceability.– Emergence of Supermarket demanded steady supply of fresh produce.

• 2003: APMC Act amended.• Contract farming can become a part of CSR strategy of

companies.• PepsiCo works with 12,000 farmers, primarily to procure

potatoes for potato chips.• Herbs (high value medicine) like Aloe vera, should be

promoted as contract farming through suitable reforms.

Faculty: Harveer Singh3

• Need for caution– Contract farming schemes tap into unpaid family

labor (Women and Children).– Soil quality depletion. (Gherkin farming in TN led

to soil depletion).– Inappropriate advice offered to the farmers.– Some “fly by night Operators” dupe farmers.

Faculty: Harveer Singh4

Thank You.

• For any feedback/query/word of thanks, the Tutor can be contacted at harveersinh@gmail.com

5