BY

SUDHARMA ELECTRICAL ENGINEERING 060270

 It is defined as an agreement between farmers and

processing and/or marketing firms for the production and supply of agricultural products under forward agreements. It is a commitment of the producer/seller to provide agricultural commodity of a certain type at a time and price, and the quantity required by a known and committed buyer. It involves the basic elements like pre agreed price quality, quantity and time. The farmer is contracted to plant the contractors crop on his land Harvest and deliver to the contractor, a quantum of produce, based upon anticipated yield and contracted acreage

 Drift of populations like small farmers to urban areas.

provides a strong base for successful cultivation. Well organized contract farming provides profitable markets to these farmers. Similarly, it also provides investors with the opportunity to guarantee a reliable source of supply, from the perspectives of both quantity and quality. Singular focus on supported crops discourages diversification.

 In ancient Greece the specific percentage of particular

crop has been paid by farmers as rents & debts. During the first century, China also recorded various forms of sharecropping. In the United States as recently as the end of the nineteenth century, sharecropping agreements allowed for between one-third and one-half of the crop to be deducted for rent payment to the landowner. In the first decades of the twentieth century, formal farmer-corporate agreements were established in colonies controlled by European powers.

 In India contract farming is being practiced in Madhya

Pradesh by Hindustan Lever Limited, Rallis & ICICI. Under this system Rallis supply agro-inputs & ICICI finances (farm credits) the farmers & HLL, the processing company requires farm produce raw material for its food processing industry, provides the buyback arrangement for farm produce output. In this arrangement, farmers benefit through the assured market for their produce in addition to timely, adequate and quality input supply including free technical know-how; HLL benefits through supply-chain efficiency; while Rallis and ICICI benefit through assured clientele for their products and services.

The Centralized Model The Multipartite Model The Informal Model

Model

Inputs and production services are often supplied

by the sponsor. This is usually done on credit through advances from the sponsor. Exposure To World Class Mechanized Agro Technology. Farmers price risk is often reduced as many contracts specify prices in advance. Bulk Supplies Versus Small Lots As Again Required By The Fresh Market

Particularly when growing new crops, farmers face

the risks of both market failure and production problems. Inefficient management or marketing problems can mean that quotas are manipulated so that not all contracted production is purchased. Sponsoring companies may be unreliable or exploit a monopoly position. The staff of sponsoring organizations may be corrupt, particularly in the allocation of quotas.

 Uninterrupted

& Regular Flow Of Raw

Material. Protection From Fluctuation In Market Pricing. Long Term Planning Made Possible. Builds Long Term Commitment Dedicated Supplier Base Generates Goodwill For The Organization.

Contracted farmers may face land constraints due

to a lack of security of tenure, thus jeopardizing sustainable long-term operations. Social and cultural constraints may affect farmers ability to produce to managers specifications. Farmers may sell outside the contract (extracontractual marketing) thereby reducing processing factory throughput. Farmers may divert inputs supplied on credit to other purposes, thereby reducing yields.

 A Profitable

Market The Physical Environment Utilities & Communications Land Availability & Tenure Input Availability Social Considerations Government Support

1. Karnataka State Agricultural Marketing Board 2.Krishi Maratavahini. 3.Madhya Pradesh State Agricultural Marketing Board 4.Maharashtra State Agricultural Marketing Board, Pune 5.Meghalaya State Agricultural Marketing Board. 6.Orissa State Agricultural Marketing Board,Bhubaneswar 7.Punjab State Marketing Board . 8.Rajasthan State Marketing Board. 9.AP Agricultural Marketing Board. 10.Domestic & Export Market Intelligence Cell . 11.Tamil Nadu Agricultural University and Agri Marketing Board 12.HP State Agricultural Marketing Board

 Agricultural Produce (Grading and Marking) Act, 1937 as

amended in 1986. Agricultural Produce Grading and Marking Act, 1937 Schedule Appended to AP (G&M) Act 1937 General Grading and Marking Rules, 1988 Commodity Grading and Marking Rules List of commodities whose Agmark Grade Standards have been covered under AP (G&M) Act 1937 Manual on Standards of Paddy Manual on Standards of Wheat Manual on Standards of Maize Manual on Standards of Mustard and Rapeseed

 yc 1_1i and yc 0 _1i represent, respectively, the average of

contract farmers actual performance under the contract and the average of their counterfactual performance without the contract. The difference yc 1_1i and yc 0 _1i provides a measure of the impact of contract farming on the performance of farmers who actually chose to join the contract. The positive or negative difference would indicate a positive (or negative) impact of contract farming.

Household characteristics including family

size value of production assets value of consumption assets value of transportation assets the distance of the farm to the market and the distance of the farm to the highway The profit functions include farm size, family size, and the value of consumption assets.

 Full consultation between farmers, extension staff and

management is essential in selecting suitable land in order to avoid environmental degradation.

crop, it must recognize farmers concern to protect their entire farming system.
There must be a willingness on the part of managers to

learn from local experience.

 It plays an important role in poverty reduction. About 60 %

of farmers are under poverty line, most of which have benefited by contract farming.
Generate a network, which bring the farmers closer to new

companies & firms which provides new technology, high quality seeds & fertilizers for cultivation.
Farmers & sponsors ,both are benefited, thus produce a good

affect on the economy of a country.