In India, until a few years ago, problems existed in getting quality raw materials for processing or fresh marketing, especially for perishable high value crops. Processing and marketing firms faced issues of high cost, lack of availability, poor quality and timeliness due to the regulatory regime, which did not permit direct purchase from farmers. On the other hand, there were often gluts in the market for fresh produce and farmers often realized unremunerative prices. After the opening up of the Indian economy in 1991 and the entry of many domestic and multinational players into the agribusiness sector, contract farming (CF), which used to be largely restricted to seed production, spread to perishable produce. It has since become the growing mode of raw material production and procurement coordination among the processors and fresh produce marketers including organic produce. This paper examines the nature and performance of such CF arrangements across crops (potato, mint and organic basmati paddy) and companies in different regions of India. It also examines the factors in the success of such models of vertical supply chain coordination and problems encountered by the contracting agencies. The paper concludes by outlining some important managerial and institutional lessons for organizing supply chains for perishable produce by global and domestic agribusiness players.
