Contract Farming: -

 

              Contract Farming: -

 Contract Farming is an arrangement between the food processor (contractor), who is usually a large organized participant, and the farmer, which contracts the farmer to plant the crop of the contractor on his property. He also agrees to harvest and supply a quantity of produce to the contractor, based on expected yield and acreage negotiated at a pre-agreed amount. The food processor provides farmers with inputs in terms of equipment and preparation, to increase product yield and quality. It results in a win-win situation that provides a stable income stream for the farmer and reduces supply shocks and guarantees high quality farm inputs that are vital to the processor. India's government strongly promoted contract farming activities. The National Agricultural Policy provides for the promotion of 'private sector involvement through contract farming and land leasing agreements to allow for accelerated technology transfer, capital inflow and assured crop production market.