agriculture review

Things About Contract Farming You Should Know

by aditya abhishek

The practice of producing agricultural raw products according to an agreement made between a farmer and buyer on fixed terms and conditions. These agreements could be formal and informal.

Contract Farming

Before making an agreement farmer must read and agree to all the terms and conditions, and should be aware of government policies intend to protect farmer's right. 

Contract farming is helpful for both farmers and corporates if practiced ethically and efficiently. Moreover every terms and conditions made by agencies should be transparent and fair. 

Britishers started contract farming for the first time during their rule in India. Cotton, indigo, tobacco were cultivated under contract farming. But that time it resulted in exploitation. 


But today contract farming is beneficial for farmers because of democratic governments interventions and policies.  It ensures high profits to farmers across the world. 

Farmers need not to worry about selling their produce, hence risk of production, price & marketing reduces. They get financial support and agriculture trainings to ensure higher & quality production. 


It is also helpful for companies who need agriculture produce meeting their quality and quantity requirements at the right time and price. 

Sometimes contract farming seems to be biased in favour of companies. Uncertain production can result in disqualification on quality and quantity terms. It gives rise to Monopsony. 


thanks for reading!

Next Article: What Is Dryland Farming?