Organization Centre for Management in Agriculture, Indian Institute of Management

Year 2008

This chapter reviews contract farming and suggests safeguard measures to be adopted while promoting contract farming in India. There are two divergent views on contract farming: (1) it promotes employment and high incomes; and (2) the relationship between firms and farmers worsen over time and the system results in ecological and economic degradation of local production systems. However, if there were enough mechanisms to monitor the contract, it would be beneficial to all parties. The government has to play an enabling role. The state agencies and NGOs might also intervene to protect farmer interests.