Contract farming – A study of impact analysis
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Date
2017
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CCSHAU
Abstract
Contract farming is a system for production and supply of agricultural/horticultural produce
under forward contracts between producers / suppliers and buyers (Haque, 2000). In contract farming a
processing firm purchases the farm produce of independent farmers under certain pre-negotiated terms
and conditions on value, quality, quantity and input supply. The National Agricultural Policy 2000,
announced by the Government of India, seeks to promote contract farming by involving the private
sector to ‘accelerate technology transfer, capital inflow and assured marketing of crop production’
(Asokan, 2005).
Young and middle aged farmers were more interested in contract farming. Contract farmers
are well educated; more numbers i.e. (70.1%) of contract farmers have studied up to matriculate and
above. Majority of contract farmers were having large size land holdings. Most of contract farmers i.e.
43.8 per cent owned medium level farm power. There is no scarcity of water for drinking but for
irrigation purpose they are depending on bore-wells/tube-wells in the sample villages, which is the
major source. Most of the contract farmers used high irrigation facility (tube-well with canal) as an
irrigation source. Majority of the respondents had medium level of innovativeness. The data indicated
that majority of contract farmers i.e. (65.60%) earned high level of farm income (above Rs.1, 90,001).
68.80 per cent of contract farmers had low level of social participation. About one third i.e. 33.80 per
cent of respondents have low level of risk orientation. One-half of the respondents were placed under
medium mass media exposure. One-half of respondents i.e. 53.10 per cent belonged to medium
category of economic motivation. Majority of contract farmers contributed for low level area under
contract farming. Cropping pattern of an area that decides the types of crops used by the farmers. In the
present study most of the famers practiced majorly cereals and vegetables.
Almost three-forth (80.00%) of the respondents had highly favourable attitude towards
contract farming. There was a significant association between age of respondents and attitude towards
contract farming ) 0.025* and highly significant association between attitude and farm
income ) = 0.048**. The data emphasized that 42.1 per cent of respondents were low level of
prospects about contract farming followed by 39.0 per cent of respondents had categorized as under
medium level prospects. The variables like education, land holding, irrigation facility, farm income and
area under contract farming are significantly associated with prospects and highly significant
association with social participation. Majority of respondents i.e. 58.8 per cent were faced medium
level of constraints under contract farming. Only variable age was highly significantly associated with
constraints. Among the contract farmers majority of respondent i.e. 63.1 per cent had experienced
medium level of impact followed by 21.9 per cent of contract framers had realised high level of impact.
Only variable economic motivation was highly significant in association with impact of contract
farming and variables like education, farm power and risk orientation had significant association with
impact.
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