Question

write any two features of contract farming?

Answer 1

Contract farming is looking towards the benefits both for the farm-producers as well as to the agro-processing firms. Producer/farmer

Makes small scale farming competitive - small farmers can access technology, credit, marketing channels and information while lowering transaction costsAssured market for their produce at their doorsteps, reducing marketing and transaction costsIt reduces the risk of production, price and marketing costs.

Contract farming can open up new markets which would otherwise be unavailable to small farmers.

It also ensures higher production of better quality, financial support in cash and /or kind and technical guidance to the farmers.In case of agri-processing level, it ensures consistent supply of agricultural produce with quality, at right time and lesser cost.

Agri-based firms

Optimally utilize their installed capacity, infrastructure and manpower, and respond to food safety and quality concerns of the consumers.Make direct private investment in agricultural activities.The price fixation is done by the negotiation between the producers and firms.The farmers enter into contract production with an assured price under term and conditions.