Table of Contents
- 1 What is contract farming with example?
- 2 Is contract farming good or bad?
- 3 What are the types of contract farming?
- 4 How will contract farming affect the farmers?
- 5 What are the five benefits of farming?
- 6 What are the features of contract farming?
- 7 What problems do farmers have to face in contract farming?
- 8 What are the benefits of farming to the farmers?
What is contract farming with example?
For example, contract farming in wheat is being practised in Madhya Pradesh by Hindustan Lever Ltd (HLL), Rallis and ICICI. Under the system, Rallis supplies agri-inputs and know-how, and ICICI finances (farm credit) the farmers.
Is contract farming good or bad?
Well managed contract farming is an effective way to develop agriculture and help the farmers. Though it is an agreement between unequal parties, by suitable intervention by the government many drawbacks and concerns can be removed. It is beneficial to both farmers and the companies.
What is the objectives of contract farming?
Contract Farming works towards: Reducing the load on the central and state level procurement systems. Increasing private sector investment in agriculture. Bringing the market focus of crop selection by Indian farmers.
What are the types of contract farming?
Broadly speaking, contract farming arrangements fall into one of five models:
- The centralized model.
- The nucleus estate model.
- The multipartite model.
- The informal model.
- The intermediary model.
How will contract farming affect the farmers?
The company entering into a direct contract with farmers will ensure better control on the quality of the end-product with both stakeholders having an equal interest in its success. Directly contracting with buyers will increase competition leading to higher prices of farm produce for farmers and higher income.
Is contract farming profitable for farmers?
The survey results show that the average revenue of a contract farm is about 11 percent higher than an average non-contract farm. The per hectare cost of production in a contract farm is about 13 percent lower and as a result the average profit margin under contract is more than 50 percent above those without contract.
What are the five benefits of farming?
7 Benefits of Agriculture in Nigeria
- Production of export crops:
- Agro tourism:
- Job creation:
- Source of raw material for other industries:
- Entrepreneurial and investment opportunities:
- Economic diversification:
- Food security:
What are the features of contract farming?
In simple words, contract farming refers to a varied formal and informal agreement made between producers and processors/buyers. It includes loose buying arrangements, simple purchase agreement and supervised production with input provision, with tied loans and risk coverage.
What is contract farming and how it works?
Contract farming was introduced for the benefit of the farmer so they can get reasonable profits from their production. It is important to set a predefined amount of the production, to be paid to the farmers. Through Contract Farming the farmers get seeds and proper pieces of equipment to produce the crop.
What problems do farmers have to face in contract farming?
Through Contract Farming the farmer’s knowledge increases and their production market value increases. The problems farmers have to face in contract farming are given below: The contract farming is more beneficial for large farmers in terms of production so the small earn less profit in comparison to large farmers.
What are the benefits of farming to the farmers?
The crop produced by the farmer will reach large markets like exports etc. The farmers will also have an opportunity to learn new methods of production and also the skills which are required in the technical aspects of the farm.
Which is the best model of contract farming?
This is the best model of contract farming as it involves less risk for both buyer and farmer. The intermediary model is mostly followed in Asia, where the subcontracts occur between the farmer and the intermediaries. These intermediaries are collectors of crops which would be generally from the community of farmers.
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