A Study on Existing Contract Farming Models in India and Framework for Hybrid Model

Abstract

The price fluctuations due to the time lag between the start of the sowing and the harvest of the agricultural produce results in huge distress to farmers. Storing perishable products is not a feasible option to be considered due to the nonavailability of proper warehousing facility. Therefore,Contract farming is looked as a means of handling risk on Price fluctuations which enables the farmers and buyers to decide the quantity, quality and price of the agricultural produce even before sowing stage.

This paper is an attempt to highlight the various Models of Contract Farming existing in India along with their prospects and challenges to farmers. Basis the analysis of these models it is very evident that Bargaining power of the corporates are much better when compared to farmers which would put the farmers to test at each stage of execution of the contract farming, which resulted in the need for a new Hybrid model which requires direct intervention from the statutory bodies. This Hybrid model would enable the farmers to have a balanced execution of the contract for both the farmers and corporates.