Contract Farming in India Rural Economy

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The process of Contract Farming in India Rural Economy is a new concept. The process of contract farming involves cultivating and harvesting for and on behalf of big business establishments or Government agencies and forwarding the produce at a pre-determined price. In return, the contracted farmers are offered high price against their farm produce. The role of contract farming in India rural economy is becoming more and more important, since organized farming practice has become the need of the hour in the world of rapid industrialization. The rapid industrialization process in India has created shortage of farmland, which in turn has necessitated organized farming practice in India.

The process of contract farming in India involves scientific and optimum use of land and farm resources for maximum output of agriculture produce. Small time farmers practicing primitive agricultural methods for cultivation and harvesting of crops dominate the Indian agriculture sector. But, with the liberalization of India economy, there has been a sudden spurt in contract farming in India. Moreover, today more and more established business houses are taking interest in the business of contract farming in India. This has happened as a result of rapid growth of retail industry in India. The growth of retail industry in India has propelled the growth of farm retail in India, which caters fresh vegetables and fruits from the farms to the Indian mass. The process of contract farming in India involves, engaging rural Indian farmers for the cultivation of agricultural produce under strict government policies. The role of Contract Farming in India Rural Economy involves government and private participation along with the rural workers. Further, it engages a good number of farmers and other rural workers to discharge other agriculture related activities.

The Indian institutes engaged for marketing agricultural products under contract marketing are as follows -

  • Karnataka State Agricultural Marketing Board
  • Krishi Maratavahini
  • Madhya Pradesh State Agricultural Marketing Board
  • Maharashtra State Agricultural Marketing Board, Pune
  • Meghalaya State Agricultural Marketing Board
  • Orissa State Agricultural Marketing Board, Bhubaneswar
  • Punjab State Marketing Board
  • Rajasthan State Marketing Board
  • AP Agricultural Marketing Board
  • Domestic & Export Market Intelligence Cell
  • Tamil Nadu Agricultural University and Agri Marketing Board
  • HP State Agricultural Marketing Board
The main agricultural products of India under the process of contract farming are as follows -

  • Food Grains - Rice, Wheat, Pulses, Cereals, Corn, Maize, Rice Bran Extractions, Sorghum, Soy meal, Suji, Parmal, Lentils, Jowar, Bajra, Chick pea,
  • Fruits & Nuts - Cashew Kernels, Cashew Nut, Cashews, Almonds, Roasted Dry Fruits, Peanuts, Groundnut, Walnut Kernels, Walnuts, Indian Peanuts, HPS Groundnuts
  • Fruits - Bananas, Beans, Cherry, Cucumbers, Dried Fruits, Dried Truffles, Carrots, Lemon, Mandarins, Mango, Meslin, Shallots, Apples, Asparagus, Grapes, Oranges, Gherkins, Turnips, Oranges, Papaya, Pineapple,
  • Vegetables – Potatoes, Bitter gourd, Stripe Gourd, Pumpkin, cauliflower, Cabbage, Tomato, Onion, Green Pepper, Drum Sticks, Lady's finger, Banana, Papaya, Spinach, Cucumber, Mushroom, Mushroom Spawn, Radiata, Seeds, Buds, Plantation & Related Products - Basil Seed, Cumin seeds, Dill Seed, Buds, Celery Seed, Hybrid Seeds, Sesame Seeds, Sesbania Seed, Sunflower Seeds, Mustard Seeds, Oil Seeds, Plant Products, Plantation, Plants, Psyllium Seed, Fennel Seed, Fenugreek Seed, Herb Seeds, Tamarind Seed, Vegetable Seeds
  • Spices - Black Pepper, Chilly, Cinnamon, Cloves, Coriander Powder, Cumin, Dry Ginger, Dry Red Chilly, Cardamom, Anise, Salt, Pepper, Fenugreek, Clove, Ginger, Turmeric, Turmeric Powder,
  • Tea & Coffee - Black Tea, Coffee, Coffee Beans, Darjeeling Teas, Assam Teas, Instant Coffee, Leaf Coffee, Leaf Tea, Packaged Tea, Green Tea, CTC Teas,
  • Tobacco & Tobacco Products - Betel nut Leaves, Betel nut, Bidi Leaves, Chewing Tobacco, Arecanut, Snuff, Opium, Pan, Jute, Tobacco, Rubber etc.
The acts and rules that governs the process of Contract Farming in India Rural Economy are as follows -

  • Agricultural Produce (Grading and Marking) Act, 1937 as amended in 1986.
  • Agricultural Produce Grading and Marking Act, 1937
  • Schedule Appended to AP (G&M) Act 1937
  • General Grading and Marking Rules, 1988
  • Commodity Grading and Marking Rules
  • List of commodities whose Agmark Grade Standards have been covered under AP (G&M) Act 1937
  • Manual on Standards of Paddy
  • Manual on Standards of Wheat
  • Manual on Standards of Maize
  • Manual on Standards of Mustard and Rapeseed

(Last Updated on 19 May 2011)