Effectiveness of contract farming: Evidence from cultivators of onion in Maharashtra

The present paper attempts to quantify the benefits of contract farming on farmers’ income and examines the determinants of participation in contract farming. The study is based on a survey of 180 farmers engaged in cultivation of onion. The study reveals that contract farming, by connecting smallholders to high-end international markets, ensures them with higher returns to the tune of Rs. 12.5 per kilogram. Access to institutional credit, extension services, farm-size, own transport, and migration significantly affected farmers’ participation in contract farming.