An Empirical Study on Contract Farming in India
DOI:
https://doi.org/10.69968/ijisem.2026v5i1254-259Keywords:
Contract Farming in India, Agricultural Marketing, Small and Marginal Farmers, Agricultural Policy and Regulation, Sustainable Agricultural DevelopmentAbstract
Contract farming in India has been gaining momentum as one of the modes of agricultural productivity in recent years. The activity of contractual farming includes the practice of maintaining agreement among farmers with their buyers. These buyers often comprise corporate companies and businesses that are interested in marketing the agricultural production. Contract farming had been evaluated as a means of combining farming and agricultural production with marketing the farm products through contractual agreement among the contracting corporations and the farmers. Contract farming has been adopted in India’s agricultural sector as a solution for promoting high-value crops, technology and others.
The trend of contract farming is often adopted for increasing awareness towards the higher quality crops, given that such activities could satiate the demands from both the corporations and businesses focused on marketing farm products and the farmers. There are several marginal and small category farmers in India with poor resources that often could be mitigated through contract farming by benefiting through contractual agreements and market access and so on. There are several states that take part in contract farming in India, along with the fact that there are legal regulations such as the APMC Act 2003 that secure regulation and government support for contract farming be effective and benefiting practices among the agriculture and corporate sectors.
However, there are certain challenges to availing fruitful and effective benefits of contract farming. This includes the potential of mistreatment of the farmers from the corporate companies and contractors. This includes the possibility of the farmers to be facing the threats of losing their contracts with the private business, particularly the small and marginal sized farmers. Moreover there could also be issues in the progressive achievement of interests of both the corporates and the farmers, due to the market and profit-oriented nature of these contracts that are extended by corporations to the farmers. The following study is an empirical overview on contract farming in India, its functioning, impact, regulatory implementations, challenges and potential benefits.
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