In 2006, Vikram Puri, CEO of Mahindra Shubhlabh, contracted farmers in Punjab to grow basmati rice for Rs 1,350 per quintal. Global demand, supply fluctuations and local speculative buying pushed the prices to Rs 1,400-1,500 per quintal and about 2,000 farmers in Jalandhar and Kapurthala reneged on their contracts, causing a loss of Rs 3.6 lakh in actuals and Rs 27 lakh in opportunity cost.
Contract farming if carefully planned and executed, provides a win-win situation for both the producer and processors. It ensures better linkage between farm and market where processor gets timely and consistent supply of raw material of the desired quality at low cost. The contract farmers in the study were the potato farmers who were under contract with the Frito Lays of Pepsi.
Contract farming is emerging as an important form of vertical coordination in agri-food markets in India, and its economic and social consequences are attracting considerable attention in the food policy debates. In this paper the authors have examined the effects of contract farming on milk on productivity, production and costs, prices and profitability.
This assessment of contract farming practices in Hoshiarpur district in Punjab by CENTAD finds that the system does not allow equal stake to the farmers in deciding terms and conditions of the contract farming practices and there is need to analyse, and make amendments at the policy level.
It happens only in India. The country is the second largest producer of food in the world, yet over 300 million people go without two square meals a day. Ironically, food worth Rs 58,000 crore
This publication examines the use of index insurance to help reduce vulnerability and poverty and adapt to climate change. Experience in index insurance to-date has been limited to individual case studies, which show promise of lessening the impacts of climate shocks, and enabling investment and growth in the agriculture sector.
