Contract Farming is operational in India for the last couple of years and an increase
in the number of corporates entering the field has been witnessed. This has
generated a debate over the effectiveness of the agribusiness model in enhancing
farm income and employment, potential impact on small farmers, degree of technology
transfer to the farmers, social responsibility of the corporates in terms of
adoption of environment-friendly production process, effective management of ex
post-opportunistic behaviour of the corporates, etc. It is observed from the
literature that barring minor exceptions, contract farming has broadly been a
successful affair. A better outcome could be expected if a number of systemic reform
measures are undertaken at the earliest. On one hand, the infrastructure level ought
to be massively augmented and on the other, contract farming should be formalised in
all states, so as to make it binding on both concerned parties.
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