MACRO ECONOMICS

Contract Farming:

It is an agreement between farmers & processing and marketing firms for the
production and supply of agricultural products under certain agreement, frequently at
predetermined prices.

Introduction:

 On agriculture nearly about 65% of Indian population is depended

 17 percent of world population.
 2.3 percent of world geographical area.
 4.2 percent of world`s water resource.
 Traditional method of farming.
 To set up and adopt commercially, technically and economically viable agribusiness
solutions.

Historical background:

 For the first time it was introduced in Taiwan in 1895 by Japanese government.
 Europeans first introduced indigo and opium cultivation in the Bengal region, under the
east Indian company rule.
 During the 1920s the ITC`s contracts for growing Virginia tobacco with the farmers of
Andhra Pradesh.
 In India it was introduced by pepsi company for the cultivation of vegetables particularly
tomato and potato in Punjab in 1927.
 During the 1960s the Emergence of seed companies, and during the 1970s the Green
Revolution and finally during the 1990s the tomato farming contracts by PepsiCo in
Punjab can be quoted as some of the milestones in the emergence of contract farming
in India.

Objective of Contract Farming:

 To achieve consistent quality.

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Need of Contract Framing in India:

 In India it is very critical for production and marketing.
 Market to overcome with inadequate linkages.
 Technology transfer, poor infrastructure and lack of capital etc…
 For to avoid the post harvest losses.
 For procurement of unfavorable conditions.
 For to avoid migrations.