Iran ranks first among the pistachio producing countries both in production and exports for the last four decades. The data on productivity clearly shows that it is relatively low compared to other countries and has remained at that level in the last decade. Past experience of different management systems of Iranian agriculture shows that none of the systems, viz. public, private and cooperatives, have been effective. Hence, there is a need for a new managerial system for pistachio orchards for the improvement of this enterprise. One of the very useful and examined ways is to go for contract farming system. At the same time, we should try to choose a competitive system, with an equal chance and right for all the individuals, cooperatives, and may be government agencies and other institutions. Under such a system, the contractors will provide all input, credit and the other needed services to the farmers. At the same time, farmers have to sell their produce to the contractors, based on a signed agreement between them. This will result in improving productivity and also the quality of produce. This can certainly lead to better price realization and improved farm incomes. This paper attempts to define the major problems associated with pistachio industry in Iran and to assess the feasibility of a contract farming system
