Dr.Banarsi Lal and Dr.Vikas Tandon
Although India is the third largest producer of food and second in vegetable and fruit production in the world but its share in the global agricultural market is around 2%.Agricultue in India is said to be the gamble in the monsoon but now the gamble in the market to sell the agricultural produce is another emerging problem for the Indian farmers. Agriculture is very important in livelihood security point of view. Production techniques and productivity of farmers were becoming uncompetitive although farming factory was endowed with technologies, capital and subsidies. Our existing research, extension and education need to be restructured so that the new agricultural know can be disseminated to the farmers. The extension functionaries of our country need not only to disseminate the detailed agricultural information but also metrological aspects need to be transferred to the farmers. They should aware the farmers in adjusting the production according to the demand.
The Indian economy growth is determined by the agricultural performance. In our country the commercialization in agriculture is must due to certain reasons such as (a) Agricultural sector provides raw material for the industries and also provides the edible goods at low price.(b)Agricultural sector ensures the optimum utilization of scarce resources such as land, time etc.(c)Creates farm surpluses for capital formation and consumer goods. Indian agriculture includes traditional technologies and modern dynamic technologies. Commercial agriculture is beneficial for the farmers due to many reasons such as commercial agriculture is production oriented, based on the principles of any business, rates are predetermined ,proper planning, proper investments, implementation of technologies, effective marketing and regular monitoring
Agriculture in India is not only the major source of livelihood but a way of life. We cannot ignore the social aspect like employment provided by this sector. Corporate farming is not an answer to the problems faced the country’s agricultural sector. What is required is contract farming where corporates enter into arrangements with farmers to supply critical inputs and buy back the produce. The challenge before us is to disseminate the new agricultural technologies to the farmers. It has been contemplated by the experts that contract farming is not possible without forward contracts. If farmers, corporate processors and marketers have to make contracts before harvesting, they have to enter into forward contracts. Ready contracts and future contracts do not achieve the economic objectives which can be better achieved by the forward contracts. Forward contracts nurture partnerships and supply chains comprising farmers, customers and corporate processors. Contract farming and forward contracts form a powerful combination that can be used by the small farmers, big farmers, government, etc.
Various companies which are associated with the processing and marketing of agricultural commodities have contract with the farmers. In contract farming, the companies provide the inputs to the farmers and buy back the product with the rate specified in advance. Various inputs such as quality seed, technological guidelines to grow the crops, fertilizers, growth hormones required in the crop, insecticides and pesticides to control the insect-pests in the crop and other materials if locally that is not available are provided by the company .The terms and conditions in contract farming are designed in advance and a contract letter is taken from the farmer. The company monitors all the management from seed to shelf. Contract farming has various advantages such as (a) market is assured to the farmer and he gets the support price.(b)He gets free of costs technological guidelines.(c)Farmer gets the quality seeds, fertilizers , insecticides and pesticides which can be used in the crops.(d)Farmer gets a financial support.(e)The middleman is eliminated in marketing the produce so the farmer gets the better price. The company also gets the advantages such as (a)Required quality produce is assured.(b)Backward market integration is possible with assured supply.(c)Residual toxicity is assured to the company. Companies for contract farming take up lot of products. Majority of companies go for the particular products. The companies select the products on the basis of various aspects such as (a)The products which are mostly national and internationally demanded are preferred. (b)The products which the company can get the better price than local market are preferred.(c)The products which have no local demand are mostly preferred so that the farmer could not sell it locally for better price.(d)The products which require less labour and more price are preferred. The companies get the order of products well in advance so the plans of production are made accordingly.
For contract farming, the company selects the area on the basis of surveys and the location is selected on the basis of crop. The areas should not be prone to the natural calamities. The area should be hailstorm free, well drained and fertile soil. There should be the availability of labour required for the cultivation of particular crops. The distance from the market should not be too much so as to reduce the transport charges. The companies adopt the cluster approach in production of crops so that extension services and procurement would be easy. The farmers in contract farming are selected on the basis of farm working members of the family. Small and marginal farmers are mostly preferred because they pay a lot of attention in farming. The companies decide the price of the products well in advance. In deciding the price of the products the companies always take care of cost of cultivation of the particular crop. The prices and cost of cultivation of other competitive crops are also considered. The progressive farmers are selected for the promotion of the crops. For this purpose the group meetings are conducted and video presentations are given to the farmers for explaining the benefits of the particular crop. Once the farmers get the taste of benefit, he does not show resistance to adopt the repeat crops. Farmers are screened for the contract farming. The registration form is taken and an agreement of contract farming is taken from him. A pass book and ID card is issued to him. The success of contract farming depends on the basis of implementation. In the implementation stage the companies issue the seeds, follow the technological practices, procurement from the site and process, pack and forward the products. Policy makers think contract farming as an important avenue, which can ensure many companies to participate. The new agricultural policy envisages acceleration of technology transfer, assured markets and increase the capital flow for some particular crops such as floriculture, oilseed crops and cotton through contract farming. Rich experience have been gained in contract farming for poultry production, mushroom cultivation ,exotic vegetables, tomato pulp, dairy farming, edible oil, baby corn cultivation, chili paste, banana processing, potato chips etc. Contract farming helps to eliminate the middlemen and thus helps to get the maximum benefit for the farmers. In our country, the contract farming is practiced in certain selected pockets for the certain crops. There is immense scope of contract farming in our country.
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