Global Journal of Commerce & Management Perspective
Open Access

Abstract

Problems and Prospects of Contract Farming In India

Dr. Bairagya Ramsundar and Sarkar Shubhabrata

Contract farming is nothing new. During the British period there was indigo plantation through contract farming. But that was exploitative. But modern contract farming is mutually advantageous. Now-a-days the term ‘contract farming’ is frequently heard. Contract Farming is an institutional arrangements in which both producers and the processors/exporters enter into a contract to supply and purchase, respectively, a specified quantum of commodity, at a pre-determined price and for a specified period of time. In this context it would be useful to discuss such issues as: what is contract farming, what are the benefits of contract farming etc. Contract Farming has become relevant in view of the recent decision of the Govt. of India permitting entry of FDI in multi-brand retail sector. In the wake of liberalization, the concept of contract farming in which national or multinational companies enter into contracts for marketing and providing technologies and invest capital. The purpose of the present paper is to discuss these issues in the simplest manner.