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Contract Farming in India – Benefits of Contract Farming

By April 18, 2020 No Comments

Farming is the only sector where India thrives to be the best in the business! But, is it managed precisely? Is it giving the benefit to the hard work being done?

Well, the answer has to be NO because farmer suicide rates speak volumes about it!

But, are we doing anything about it? Yes! The change was due and it did happen in the form of Contract Farming!

Contract Farming: What is it?

Earlier Agriculture sector was mostly dependent upon corporate honchos for small initiatives! But, now with the infusion of big organizations like ITC, TATA, and Reliance, it has certainly become one of the primary initiatives making it mainstream of the big houses!

“Through Contract Farming, big businesses will have an agreement with specific farmers to harvest according to their needs.”

Yes, with the help of this agreement, farmers will be working on the production of goods according to the needs of cooperative firms. It will be done as per the given statements in the agreement which highlights the pricing, the number of goods, and various other aspects as well!

Why Contract Farming Was The Need Of The Time?

Maintaining profit balance in the field of agriculture was becoming a huge issue in the agriculture sector! This is the reason why there harsh steps taking by farmers and this leads to huge loss as well! Things did needed a change and boy it did with the infusion of Contract Farming!

Contract farming helps farmers and corporations to maintain the profit ratio and reduce all the previous hurdles. In detail, the farmers and companies will be discussing about the work which needs to be done with the values related to it! Yes, the farmers will be supplying the agreed amount of work and the companies will have to pay the amount as specified in the agreement! 

How it helped, take a look:

  1. The best part is that farmers will not have anything at risk if the crops are damaged because of natural causes! 
  2. With the help of this agreement, the farmer’s production market value also gets better with their knowledge!
  3. The profits were distributed equally of the entire work done and it benefited farmers quite significantly!
  4. There will be no one between the buyer and seller which will help farmers get the right price according to their needs. 
  5. It helped farmers avail the best equipment and seeds to proceed ahead with the farming.

So, this shows why Contract Farming was the need of the time to manage the agriculture sector in precisely!

The Boxes Contract Farming Ticked

Above you learned, how the contract farming changed things dramatically! But, it didn’t end there! This step was taken with primary objectives in mind which can help every individual associated with this sector in the long run. Take a look at how:

  1. It helps farmers to remain confident as it helps them have a permanent source of income.
  2. It also enhances opportunities because farmers will be paid while being on the field as per corporate needs. 
  3. The stress over the state and also central occupation systems will be reduced completely!
  4. It has also boosted investment in the agriculture field with the private sector showing interests are increasing on a regular note!

So, these are the major concerns managed by contract farming and have successfully helped farmers all across the country. It has boosted this sector exceptionally and made it possible for farmers to avail the returns they deserve!

Are There Any Issues As Well?

With contract farming, farmers are surely getting continuous work and payment but the amount is low. Yes, the contractors keep the pricing minimal for the farmers so that profit remains high. Another issue that comes in with contract farming is the chance of improvement in this form of service is quite low. The farmers are not expected to get any kind of feedback from the consumers. 

Wrapping Up

Contract Farming does make a mark and help farmers get rid of the trouble they faced earlier. Now, not only farmers have the certainty that their dues will be paid but also there will be no risk attached to their service! Hopefully, all your doubts are cleared related to the term contract farming! To know more keep yourself busy with Agro Bloggers as we come up with all your answers!

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