Contract farming as a means to coordinate linkages between farmers and agribusiness firms is being promoted by the Food and Agriculture Organization of the United Nations (FAO) in Georgia under the EU-funded European Neighbourhood Programme for Agriculture and Rural Development (ENPARD). As part of the ongoing activities, a two-day training workshop was organized in Tbilisi to discuss basic concepts, planning and implementation issues, legal and regulatory aspects and case studies of contract farming experiences globally.

Contract farming is based on an agreement between a buyer and farmers establishing conditions for the production and marketing of farm products. Under contract farming, producers commit to the future delivery of farm products to a buyer under agreed specifications that can include prices, production technologies, quality characteristics and production delivery dates, among other mutually agreed conditions. To be sustainable in the long run, a contract farming agreement should be mutually beneficial to the buyers and farmers.

The workshop was facilitated by Dr. Carlos da Silva, Professor of Agro-industrial Economics and Management at the Federal University of Viçosa, in Brazil and former Senior Agribusiness Economist at FAO Rome.

``There is a growing interest in contract farming globally because it is one of the proven mechanisms that can improve efficiency in transforming food and agriculture systems,`` said Professor da Silva.

The presentations on the basic concepts and legal aspects of planning and implementing contract farming were followed by discussions among participants from the Ministry of Agriculture, private sector, research organizations and international non-governmental agencies.

``We are promoting farming contracts in Georgia because well-established commitments between the buyers and farmers can guarantee a secure market for the products, thereby allowing farmers to reduce market risks and earn increased revenues. Buyers in turn guarantee the supply of the agricultural products they need, this increasing the efficiency of their procurement systems and increasing returns on their investments,`` said Lasha Dolidze, FAO-ENPARD Project Manager..

The training workshop was organised with the support of EU-funded ENPARD programme. Implemented since 2013 with a total budget of EUR 102 million, the main goal of ENPARD is to reduce rural poverty in Georgia.