Contract Farming
Contract farming is a system where farmers and buyers (companies, processors, exporters, etc.) enter into a pre-agreed contract for the production and supply of agricultural products under specific conditions.
Key Features:
- Pre-agreed Price: The price of the produce is fixed before sowing or at an early stage.
- Input Supply: The buyer may provide seeds, fertilizers, technical guidance, and other inputs.
- Quality Standards: Produce must meet quality, quantity, and delivery requirements as per the contract.
- Assured Market: Farmers get a guaranteed market, reducing the risk of price fluctuations.
Benefits to Farmers:
- Access to quality inputs and modern technology.
- Reduced marketing risk due to assured buy-back.
- Improved income stability.
- Exposure to better farming practices and technical guidance.
Benefits to Buyers:
- Steady and reliable supply of raw material.
- Better control over quality and production process.
- Reduced need for intermediaries and market uncertainty.
