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Contract Farming: Problems, Prospects and its Effect on Income and Employment

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  • Kumar, Jagdish
  • Kumar K., Prakash

Abstract

This farm-level study conducted in the Tumkur district of Karnataka state has reported the effect of contract farming on income and employment generation and has identified constraints in and prospects of contract farming. Both income and employment generation have been found higher, almost double, on contract than non-contract farms. The study has observed dominance of female labour on both types of farms. Delayed payment for crop produce, lack of credit for crop production, scarcity of water for irrigation, erratic power supply and difficulty in meeting quality requirements have been found to be the major constraints faced by contract farmers. The scarcity of water for irrigation, erratic power supply, lack of credit for crop production, and lower price for crop produce have been identified as major constraints of non-contract farmers. The major constraints expressed by the contracting agencies in expanding contract farming include violation of terms and conditions by farmers, lack of proper management by the company, frequent price fluctuations in international markets, and scarcity of transport vehicles during peak periods.

Suggested Citation

  • Kumar, Jagdish & Kumar K., Prakash, 2008. "Contract Farming: Problems, Prospects and its Effect on Income and Employment," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 21(2).
    • Handle: RePEc:ags:aerrae:47678
    DOI: 10.22004/ag.econ.47678
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    References listed on IDEAS

    as
    1. Dileep, B.K. & Grover, R.K. & Rai, K.N., 2002. "Contract Farming in Tomato: An Economic Analysis," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 57(2), June.
    2. Haque, T., 2000. "Contractual Arrangements in Land and Labour Markets in Rural India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 55(3), September.
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    Cited by:

    1. Harshana PVS, 2019. "Analysis of Satisfaction of Small Cucumber Contract Famers in Predominantly Agriculture areas in Sri Lanka," Annals of Social Sciences & Management studies, Juniper Publishers Inc., vol. 2(4), pages 92-99, January.
    2. Mai Chiem Tuyen & Prapinwadee Sirisupluxana & Isriya Bunyasiri & Pham Xuan Hung, 2022. "Perceptions, Problems and Prospects of Contract Farming: Insights from Rice Production in Vietnam," Sustainability, MDPI, vol. 14(19), pages 1-22, September.
    3. Mishra, Ashok K. & Mayorga, Joaquin & Kumar, Anjani, 2021. "Technology and Managerial Gaps in Contract Farming:The Case of Specialty Crop Production," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(1), January.
    4. Bellemare, Marc F. & Lee, Yu Na & Novak, Lindsey, 2021. "Contract farming as partial insurance," World Development, Elsevier, vol. 140(C).
    5. Thomas Kopp & Ashok K. Mishra, 2022. "Perishability and market power in Nepalese food crop production," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(2), pages 518-540, June.
    6. Mishra, Ashok K. & Kumar, Anjani & Joshi, Pramod K. & D'Souza, Alwin & Tripathi, Gaurav, 2018. "How can organic rice be a boon to smallholders? Evidence from contract farming in India," Food Policy, Elsevier, vol. 75(C), pages 147-157.
    7. Freddy Ruzhani & Mushunje Abbyssinia, 2022. "Perceptions of Small-Scale Farmers on Tobacco Contract Farming: The Case of Marondera Rural District, Zimbabwe," Journal of Economics and Behavioral Studies, AMH International, vol. 14(3), pages 1-10.
    8. Kumar, A. & Mishra, A. & Joshi, P. & D'Souza, A., 2018. "Impact of Contract Farming and Risk Preference on Food Security: The Case of Organic Basmati Rice Smallholders," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277008, International Association of Agricultural Economists.
    9. Tripathi, G. & Kumar, A. & Roy, D. & Joshi, P., 2018. "Profits from participation in contract farming: Evidence from cultivators of onion, okra and pomegranate in Maharashtra, India," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277106, International Association of Agricultural Economists.
    10. Marc F. Bellemare, 2018. "Contract farming: opportunity cost and trade†offs," Agricultural Economics, International Association of Agricultural Economists, vol. 49(3), pages 279-288, May.
    11. Ranjeet Rajput & Sri Vanamalla Venkataraman, 2022. "A violent market price contract for agribusiness supply chain," Annals of Operations Research, Springer, vol. 315(2), pages 1971-1996, August.

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