CONTRACT FARMING:
A contractual agreement between a buyer and a farmer wherein a farmer agrees to grow a specific agricultural production in lieu of money can typically be described as Contract farming. This contract or agreement lays down certain fixed conditions with regards to the quality, standard, quantity, etc. in terms of the agricultural produce in return for which the buyer commits to buy the product for a fixed amount.
This system entails multiple benefits like extra support to small-sized farmers, entry into a market free of intermediaries, an assured market for their produce right at their doorstep and technical and financial support for the farmers.
Now, Agroforestry gives farmers and wood-based industries this lucrative opportunity to get into this symbiotic relation through contract farming. A company or an Agro-based firm can approach an agriculturist to grow Agro-wood for them at a fixed but profitable rate. It is easy to understand that the higher the quantum generated by farmers the stronger the equilibrium between the demand and supply and simultaneously the economic condition of the farmer keeps getting healthier. Hence, contract farming is actually the missing piece of the puzzle that brings the industry owners and the farmers together.
The members at AIPM understand these dynamics closely and therefore work closely towards promoting contract farming as a means of agroforestry for achieving the principal objective of supplying planting material, guiding the production of crops, facilitating bank loans and an assured buy-back agreement.
The Association ensures a good remuneration to farmers to ensure their welfare and encourage contract farming right from the pre-planting, planting, and harvest by laying emphasis on the multiple benefits of agroforestry — ranging from additional income to farmers to carbon sequestration for combating climate change. Hence Agroforestry promotes Contract Framing as an economic plan with a profound ecological Impact addressing soil health, water sequestration, farmer economics, and biodiversity revival all in one go.
OBJECTIVES OF CONTRACT FARMING
- Supplying planting material
- Guiding production of crops
- Facilitate bank loan
- Assured buyback agreement
The Industry has encouraged its members to plan its activities around contract Farming so that returns start flowing and would enable to fulfil the vision of “Atma-Nirbhar Bharat” simultaneously ensuring quick returns to farmers as well as fulfil Industry requirements.