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CONTRACT FARMING: A MULTI-DIMENSIONAL ANALYSIS

KrishiKosh

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Title CONTRACT FARMING: A MULTI-DIMENSIONAL ANALYSIS
 
Creator Arun Kumar. S
 
Contributor Premlata Singh
 
Subject agreements, contract farming, marketing, crops, markets, biological phenomena, cotton, productivity, economics, area
 
Description t-7928
In the present era of globalization, Indian agriculture is undergoing a
distinctive transformation process. The farmers are subjected to more of the risks
and it causes lots of distress in their lives. The increased number of farmers’ suicides
indicates the importance of effective ri
sk management strategy. Understanding
agricultural risks and the ways of managi
ng it is therefore a topic that deserves
serious attention.
A contract-farming arrangement is seen as a promising alternative that
typically obliges a firm to supply inputs, extension, or credit, in exchange for a
marketing agreement that fixes a price for the product and binds the farmer to follow
a particular production method or input re
gimen. The present study analyzed the
contract farming by delving with various
dimensions. The specific objectives of the
study were to study the genesis of contract farming, to draw the profiles of the
contract farmers and non-contracting farmers,
to identify the motivating factors of
the contract farmers and the contracting firm, to study the constraints of the
stakeholders, to study the contract farming practices and procedures, to identify the
constraints faced by the stakeholders and to study the effectiveness of contract
farming.
The study was purposively conducted in Tamil Nadu as this state has
separate policy on contract farming. Two
crops were selected for the study – Coleus
and Cotton. Two contracting firm dealing with these two crops were selected. From
the company’s list of contract farmers, forty contract farmers were randomly
selected from each contracting firm and
forty non-contract farmers were selected
from each crop. Therefore, totally 160 farmers were taken for the study.
Contract farming has existed in India since colonial period. The British have
cultivated indigo, opium, tea, coffee under contracts. After independence, in
Maharashtra sugarcane was produced under contract and in Gujarat the milk co-
operatives followed the foot paths. Contract farming by Pepsico in Punjab had a
positive influence and many companies in different states adopted contract farming
in different crops. In Tamil Nadu, the contract farming was present in sugarcane,
seed production and broilers. The contract farming in cotton developed out of
increased demand for the quality cotton and increased cost of production for the
farmers. In case of coleus, it gained popul
arity lately and in selected regions. The
increased demand of the coleus in foreign market and the poor market has led to
contract farming. The importance of cont
ract farming can be
perceived from the
efforts taken by the central which has suggested through the model APMC act and
the governments of many states have made necessary amendments.
Most of the contract farmers were in the middle aged category. But the
contract farmers were relatively younger,
attended more years of schooling than the
non-contract farmers. Coleus contract farm
ers were more from the joint family than
the cotton contract farmers. Mostly the contract farmers were of small and semi-
medium farmers and they were purely depe
ndent on farming. The level of social
participation, urban contact, extension agency contact, mass media utilization,
communication skills, economic motivation, innovative proneness, risk orientation,
planning orientation, scientific orientati
on and marketing orientation was relatively
higher for the contract farmers. Education,
social participation, urban contact and
extension agency contact had significant differences between the profiles of the
contract and non-contract farmers.
Assured price, immediate payment, reduce the credit burden, input assistance
are the four important motives of the contract farmers to enter contract farming.
Input assistance, increased income, assured market, financial assistance, recognition
among friends and relatives, success, know
ledge on new technologies, security are
the other motives reported by the respondents. For the contracting firms, suitability
of crop, interest in medicinal plants, remuneration, motivation to do something
useful and opportunity to serve, assured and timely supply of cotton, demand for
fine and super fine cotton and quality produce are the motives for them to enter
contract farming.
Sudden intervention of the brokers, absence of government’s role, no
improvement in the price, dissatisfaction with the advices, lower price, rejection of
produce and stress are the constraints faced by the contract farmers. In case of the
non-contract farmers, lower price, unknow
n procedures, No belief on contracting
company, insecurity and not approached by the contracting company are some of the
constraints reported by the non-contract farmers.
Both the contracting companies used written agreements for making the
contracts. The contracts contained the pre-
determined price, responsibilities of the
 
Date 2017-01-24T15:25:05Z
2017-01-24T15:25:05Z
2008
 
Type Thesis
 
Identifier http://krishikosh.egranth.ac.in/handle/1/97435
 
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