Contract Farming and Agreement
Contract Farming can be defined as an agreement between farmers and processing or marketing firms for the production and supply of agricultural products under forward agreements, frequently at predetermined prices. Contract Farming is essentially an agreement between unequal parties, companies, Government bodies or individual entrepreneurs on the one hand and economically weaker farmers on the other.
The main feature of Contract Farming is that the buyer/contractor supplies all the material inputs and technical advice required for cultivation to the cultivator. This approach is widely used, not only for tree and cash crops but also, increasingly for fruits and vegetables, poultry, pigs, dairy products and even prawn and fish. Indeed, Contract Farming is characterized by its "enormous diversity" not only with regard to the products contracted, but also in relation to the many different ways in which it can be carried out.
(Reference: Globalization and Contract Farming in India-Advantages and Problems,
Shoja Rani B N, Government College, Kottayam - Paper presented at the Conference on Global Competition & Competitiveness of Indian Corporates, IIM K and IIM L)
The main feature of Contract Farming is that the buyer/contractor supplies all the material inputs and technical advice required for cultivation to the cultivator. This approach is widely used, not only for tree and cash crops but also, increasingly for fruits and vegetables, poultry, pigs, dairy products and even prawn and fish. Indeed, Contract Farming is characterized by its "enormous diversity" not only with regard to the products contracted, but also in relation to the many different ways in which it can be carried out.
(Reference: Globalization and Contract Farming in India-Advantages and Problems,
Shoja Rani B N, Government College, Kottayam - Paper presented at the Conference on Global Competition & Competitiveness of Indian Corporates, IIM K and IIM L)
