Simranpreet Kaur

Contract farming is an agreement where a farmer and a buyer (like a food processor or retailer) agree in advance on the terms of agricultural production and marketing. This includes pre-determined prices, quantities, quality, and delivery schedules for a specific product. Essentially, the buyer guarantees to purchase the farmer's produce at a set price, while the farmer agrees to supply it according to the contract terms.

https://www.fao.org/uploads/media/Contract-Farming-Introduction.pdf

Thanks!

Hey Kaur! I believe contract farming works as a mutually beneficial arrangement where farmers and buyers enter into agreements to ensure a steady supply of agricultural products. Through these contracts, farmers are often provided with necessary inputs like seeds and fertilizers, and in return, they commit to growing specific crops according to agreed-upon standards. The buyer benefits from a consistent supply of quality products, while farmers gain access to markets and financial stability, as prices are often fixed in advance. However, this system is not without risks for farmers, as they may find themselves bound by strict terms or subject to price fluctuations, which could sometimes work against them. Despite these challenges, I reckon contract farming has the potential to enhance agricultural efficiency and market access if the terms are fair and transparent.