Contract farming in India: A review

The establishment of an agrarian economy that ensures food and nutritional security for a population of over a billion, raw material for an expanding industrial base, surpluses for exports, and a fair and equitable reward system for the farming community requires commitment driven contract farming which clearly is a viable alternative farming model. Previous literature reveals that several Indian and multinational companies have already begun contract farming initiatives in India and have been broadly successful. We find that their success is dependent on a profitable market, the physical and social environment, and government support. However, effort is needed to reduce negative impacts which arise from contract farming via the active involvement of institutions governing the contract farming business. The overall future of contract farming in India is quite promising due to increasing trend for organised retailing amongst the burgeoning middle class population and the food safety requirements of the export market in developed countries.