Contract Farming Resource Centre

An Innovative Marketing Model for linking small-scale Sorghum Farmers to Alcohol Industry in China: A case study

Year 2009

Market access is one of the most critical linkages in farming business for the rural farm households, it is also evident that they are a prerequisite for enhancing agriculture-based economic growth and increasing rural incomes. Rural incomes will not be substantially increased by exclusive emphasis on subsistence food crop production; rather, more market-oriented production systems are needed. These require intensification of agricultural production systems, increased commercialization and specialization of production. In an effort to address the above production and market related constrains faced by the small-scale sorghum farmers; ICRISAT implemented a project on “Enhanced utilization of sorghum and pearl millet grains in poultry feed industry to improve the livelihoods of small scale farmers in Asia” funded by CFC in collaboration with the farmers in the dry land areas in Andhra Pradesh and Maharashtra states of India; Shenyang province of China and Suphan Buri ,Kanchanaburi, Nakhon Sawan and Lopburi provinces of Thailand. Efforts were made to link farmers to quality inputs supplies, improved low cost production technologies to enhance sorghum productivity. Arrangements were made with public sector banks to extend institutional credit to farmers. The market related constraints were addressed through innovative farmer- market linkages by linking groups of farmers with industrial end users (alcohol industry) by which the farmers were able to get assured and better prices for their farm produce. The innovative marketing linkages through contract farming have yielded positive results. The farmers and partners have gained practical experience in adopting the contract farming model. The lessons learnt in the project in supporting small-scale sorghum producers in accessing markets are interesting and have been able to address market constraints and help farmers in responding to new opportunities resulting in better incomes. This paper presents the experiences of contract farming model in China with alcohol industry.