AN ANALYSIS OF CONTRACT FARMING IN POTATO IN KARNATAKA
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Date
15-07-09
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University of Agricultural Sciences, Bangalore
Abstract
Contract farming is evolving as a better alternative for the farmers to face
the marketing hurdles. An attempt has been made in this study to assess the
relative economics of Potato cultivation under contract farming vis-à-vis under
proprietor farming and to study the institutional arrangements in contract
farming, in Hassan district of Karnataka. The study is based on the primary
data collected from a sample of 30 contract farmers and another sample of 30
farmers who cultivate Potato under proprietor farming. In the study area, two
companies, viz., Pepsi and ITC are engaged in contract farming for Potato.
The cost of production of potato under contract farming was high at Rs.
25,258 per acre as compared to Rs. 14,834 incurred under proprietor farming.
Under contract farming, a net return of Rs.7,503 was realized per acre, where
as there was a loss of Rs.5,215 under proprietor farming. The gross returns
obtained under proprietor farming are far lower as the crop was affected by late
blight, resulting in yield loss. However, the variety Pepsi (of Pepsi Company)
and Atlanta (of ITC Company) cultivated under contract farming were resistant
to late blight and as such the crop output and the returns were not affected.
The contracting companies, before making a contract, approach the farmer
and make a written contract about the output price. The company provides
seeds and pesticides, at cost, to ensure quality of output. In addition, it
undertakes weekly field visits and provides needed technical advice to the
farmers. After harvest, the entire output is procured by the company at the
contracted price. Assured price before sowing, higher yield because of access to
improved verities and better crop management are the distinct advantages
enjoyed by the contract farmers.