02767 - 282833


Contract Farming

Contract Farming is an institutional arrangements in which bothproducers and the processors/exporters enter into a contract tosupply and purchase, respectively, a specified quantum ofcommodity, at a pre-determined price and for a specified periodof time.Contract farming can be defined as agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for the production and marketing of a farm product or products. Typically, the farmer agrees to provide agreed quantities of a specific agricultural product. These should meet the quality standards of the purchaser and be supplied at the time determined by the purchaser. In turn, the buyer commits to purchase the product and, in some cases, to support production through, for example, the supply of farm inputs, land preparation and the provision of technical advice.

Historical Background

For the first time it was introduced in Taiwan in 1895 by Japanese government In India it was introduced by Pepsi company for the cultivation of vegetables particularly tomato and potato in Hosiarpur taluk of Rajasthan in 1927 In Karnataka contract farming was started with the cultivation of gherkin in 20th century

Nature Of The Contract Farming

The farming contracts may fall into three categories Market specification contracts :- are pre harvest agreement that bind the processing firm and the growth to a particular set of conditions governing the sale of the crop. These conditions often specify price, quality and timing. Resource –Providing Contracts :- obliges the processor to supply crop inputs, extension or credit, in exchange for a marketing agreement. Production management contracts – binds the farmer to fallow a particular production method a input regimen, usually in exchange for a marketing agreement or resource provision.

Why Contract Farming ?

To reduce the load on the central & state level procurement system.To increase private sector investment in agriculture. To bring about a market focus in terms of crop selection by Indian farmers.To generate a steady source of income at the individual farmer level.To promote processing & value addition.To generate gainful employment in rural communities, particularly for landless agricultural labour.To flatten as far as possible, any seasonality associated with such employment.To reduce migration from ruralto urban areas.To promote rural self-reliance in general by pooling locally available resources & expertise to meet new challenges.

The Advantages Of Contract Farming

Exposure To World Class Mechanised Agro Technology.Obtains An Assured Up Front Price & Market Outlet For His Produce.No Requirement To Grade Fruit, As Mandatory For Fresh Market Sale.Bulk Supplies Versus Small Lots As Again Reqd By The Fresh Market. Crop Monitoring On A Regular Basis. Technical Advice, Free Of Cost At His Doorstep. Supplies Of Healthy Disease Free Nursery,Agricultural Implements,Technical Bulletins Etc.Remunerative Returns

Satnam Psyllium India’ s leading Manufacturer & Exporter Of Psyllium products in the world. Download E-Brochure