Contract Farming:
India has emerged as a major exporter of French Fries, which owes much contract farming through which companies procuring potato directly from growers and deepening farmer engagement.
- Contract Farming is an agreement between farmers (producers) and buyers in which both agree in advance on the terms and conditions for the production and marketing of farm products.
- These conditions usually specify the price to be paid to the farmer, the quantity and quality of the product demanded by the buyer, and the date for delivery to buyers.
- In some cases the contract may also include more detailed information on how the production will be carried out or if inputs such as seeds, fertilizers and technical advice will be provided by the buyer.
- Advantages to farmers
- Financial support: Easier access to inputs, services and credit.
- It will help in improved production and management skills.
- Secure market or access new markets.
- It helps in reduction of price-related risks.
- It will generate more stable income and helps in better planning.
