Contract Farming

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CREDIT SEMINAR REPORT
ON

CONTRACT FARMING

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Submitted to: Submitted By: Dr. Madhu sharma M. Nageswara Rao Associate Professor MBA (AB) 1st year

Institute of Agri Business Management
Rajasthan Agricultural University
Bikaner Rajasthan
2008-2010

CONTENTS

1. INTRODUCTION
1.1. DEFINITION
1.2. BROAD OBJECTIVES
1.3. IMPORTANCE OF CONTRACT FARMING
1.4. CONTRACT FARMING AGREEMENT

2. MODELS OF CONTRACT FARMING
2.1. BI-PARTITE MODEL
2.2. TRI-PARTITE MODEL
2.3. QUAD-PARTITE MODEL

3. SPECIFICATIONS IN CONTRACT FARMING

4. CONTRACT FARMING PROCESS
4.1. COORDINATING PRODUCTION
4.2. MANAGING THE AGRONOMY
4.3. FARMER MANAGEMENT RELATION

5. ACTS AND RULES IN CONTRACT FARMING
5.1. APMC ACT

6. AGRICULTURAL PRODUCTS UNDER CONTRACT FARMING

7. GOVERNMENT INTIATIVES

8. ADVANTAGES & DISADVANTAGES OF CONTRACT FARMING

9. IMPORTANT PLAYERS IN CONTRACT FARMING IN INDIA

10. SCHEMES IN CONTRACT FARMING

11. IMPACT OF WTO ON CONTRACT FARMING

12. PEPSICO’S CASE
13.1. REASONS FOR SUCCESS

13. CONCLUSION AND REFERENCES

1. INTRODUCTION

The process of Contract Farming in India Rural Economy is a new concept. A combination of agriculture reforms and a huge business opportunity has generated interest in contract farming The rapid industrialization process in India has created shortage of farmland, which in turn has necessitated organized farming practice in India. The role of contract farming in India rural economy is becoming more and more important, since organized farming practice has become the need of the hour in the world of rapid industrialization. With the liberalization of India economy, there has been a sudden spurt in contract farming in India.

The process of contract farming in India involves scientific and optimum use of land and farm resources for maximum output of agriculture produce. Small time farmers practicing primitive agricultural methods for cultivation and harvesting of crops dominate the Indian agriculture sector. Moreover, today more and more established business houses are taking interest in the business of contract farming in India. This has happened as a result of rapid growth of retail industry in India. The growth of retail industry in India has propelled the growth of farm retail in India, which caters fresh vegetables and fruits from the farms to the Indian mass.

According to sources in the agriculture ministry, the total area currently under contract farming covers nearly 7m acres of the total cultivable land of 400m acres, less than 2 per cent. However, if one were to count purely corporate contracts with farmers for their crops, then this figure would barely touch 200,000 acre.

Contract farming is increasingly being presented as a solution for the problems of Indian agriculture, by major international donor agencies, multinational companies and even the government. The process of contract farming in India involves, engaging rural Indian farmers for the cultivation of agricultural produce under strict government policies. The role of Contract Farming in India Rural Economy involves government and private participation along with the rural workers. Further, it engages a good number of farmers and other rural workers to discharge other agriculture related activities.

This system has old historical resonances, such as the infamous contracts enforced by indigo planters in eastern India during the early colonial...
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