Contract Farming: Opportunities and Risks for Small Scale Farmers

In addition to increasing net income of the producer, contract farming has the potential to infuse new technologies, quality inputs and investment into agriculture, said Mangla Rai, Director General of the Indian Council of Agricultural Research (ICAR). This was stated during the workshop on “Contract Farming: Methods and Experiences”, part of the Indo-US Knowledge Initiative on Agriculture. The workshop was conducted jointly by the United States Department of Agriculture (USDA) and the Indian Council of Agricultural Research (ICAR) in New Delhi.

During the inaugural speech, the Indian agriculture minister Sharad Pawar explained that the demand for agricultural products is rising because of the growing economy, and due to increasing urbanization and globalization. However, Pawar cautioned about concerns on contract farming, such as the exclusion of small farmers and the possible adverse impact of contract farming on food security. The government’s main concern is how benefits of emerging opportunities reach the producers, especially the smallholders, he said. Since the small farmers face problems relating to credit, technology, inputs and market access, Shri Pawar suggested that agribusiness firms integrate farmers in their supply chains through institutions such as cooperatives, producers’ associations and contract farming.

The full news story is available at: http://pib.nic.in/release/release.asp?relid=27533. For further information contact: b.choudhary@isaaa.org.