Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
56Activity
0 of .
Results for:
No results containing your search query
P. 1
Rural Marketing- Contract farming

Rural Marketing- Contract farming

Ratings:

4.46

(13)
|Views: 4,502 |Likes:
Published by ABID H
Rural Marketing- Contract farming
Rural Marketing- Contract farming

More info:

Published by: ABID H on Sep 04, 2008
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

07/08/2013

pdf

text

original

 
IFIM
14/07/2008
RURAL MARKETINGTERM PAPER
CONTRACT FARMING
Suraj Kumar SabatKamalika Pal
 
 
URAL
 
MARKETING
:
TERM
 
PAPER 
 
ON
CONTRACT
 
FARMING
Contents:
What is contract farming?
Farmers perspective
Corporate perspective
Changes in the rural scene because of contract farming
Recent cases and studies
The downsides and failures
Future
learning
What is contract farming?
 
Contract Farming can be traced back to colonial period when commodities like Collin
 Indigo
were produced by the Indian farmers for English factories.
Seed production
has been carried outthrough contract farming by the seed companies quite successfully for more than four decades in thecountry. The new agricultural policy of 2000 sought to promote growth of private sector participation inagribusiness through contract farming and land bearing arrangements to accelerate technology transfers,capital inflows and assured market for crops .The colonial period saw the introduction of cash crops suchas tea, coffee, and rubber, poppy and indigo in various parts of the country, mostly through a centralexpatriate-owned estate surrounded by small out growers model. ITC introduced cultivation of 
Virginiatobacco
in Coastal Andhra Pradesh in the 1920’s incorporating most elements of a fair contract farmingsystem and met with good farmer response. This was replaced by auctions in 1984. Organized public and private seed companies which emerged in the 1960’s. The Pepsi-co introduced
tomato
cultivation inPunjab in the 1990’s under farming to obtain inputs for its paste-manufacturing facility established as a pre-condition to its entry in to India. This was sold to Hindustan Lever in2000, which had earlier acquiredthe Kissan Karnataka.Contract Farming was the strategy of choice for almost all food processing projects contemplatedin the 1980’s and 1990’s.ContractFarming is again vogue, and even tried for bulk production of subsistence crops, such as
 paddy rice
,
maize
and
whea
t. Commodity co-operatives, which emerged in the1950’s, provided most services envisaged under ideal contract farming to their members and bought back the supplies offered at contracted prices, although these were not strictly contract arrangements. Thesucceeded enormously, leading to their replication and compelling private companies also to adopt similar approaches. Contract Farming is now considered to be a corrective to market imperfections and serving a
2
|
Page
 
useful purpose in India in its own limited sphere. Contract Farming has been promoted in the recent threedecades as an institutional innovation to improve agricultural performance in less developed countries.This system was accepted and used as one of the promising institutional frameworks for the delivery of  price incentives, technology and other agricultural inputs. Local Governments, private local firms,Multinational companies, some international aid and lending agencies etc have been involved in thesecontract farming schemesContract farming generally involves: a pre-agreed price between the company and the farmer,along with measures of quality, quantity, acreage to be farmed, and/or duration of the contract. Inthis system, the contractor supplies all the inputs required for cultivation, and the farmer isresponsible for land and labor.However, the terms and nature of the contract vary according to the crops grown, the agenciesinvolved, the farmers themselves, and the technologies and context in which contract farming istaken up. The farmers' participation is generally limited to production.At a very fundamental level, contract farming is essentially a means of allocating the distributionof risk, between processor & grower. The latter assumes risks associated with production whilethe former assumes the risks of marketing the final produce. As has been observed however in practical terms, there exists, considerable interdependence between the two parties. Thedevelopment of contract farming will succeed if both parties share the risk & rewards.
 T
HE
 
BROAD
 
OBJECTIVES
 
OF
 
PROMOTING
 
CONTRACT
 
FARMING
 
WOULD
 
BE
:
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, thereby generating gainful rural employment.
To reduce migration from rural to urban areas.Managed correctly, contract farming can facilitate a response and adjustment mechanism tochanging economic forces. Identifying the nature of the crop, its marketability and then evolvingthe technology to be used for production and processing are critical determinants of contractfarming. In general, crops easily incorporated in the contract farming are those that have highrevenue per hectare and where the technological model gives significant improvements in yields.Recognizing that Indian agriculture holds the key to its own development, it will be required tocreate our own region & crop specific contract farming models.
 T
HE
 
MAIN
 
AGRICULTURAL
 
PRODUCTS
 
OF
I
NDIA
 
UNDER
 
 THE
 
PROCESS
 
OF
 
CONTRACT
 
FARMING
 
ARE
 
AS
 
FOLLOWS
 -3
|
Page

Activity (56)

You've already reviewed this. Edit your review.
1 hundred reads
1 thousand reads
sekhar_ntpc liked this
Muttamwega Mtaka liked this
varunthakran liked this
windua liked this
Akram Hoque liked this
Vora Kevin liked this
deepeshbelwal liked this

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->