Ø      Union Govt.’s National Agricultural Policy on Contract Farming :

à  The Government on 28th July 2000 made public a National Agriculture Policy aimed at catapulting agricultural growth to over 4 per cent per annum by 2005.

à  It also envisages that “Private sector participation will be promoted through contract farming and land leasing arrangements to allow accelerated technology transfer, capital inflow and assured market for crop production, especially of oilseeds, cotton and horticultural crops”

Ø      Contract Farming :

à  “Contract farming” is “a system for the production and agricultural/horticultural produce under forward contracts between producers/suppliers and buyers. The essence of such arrangement is the commitment of the producer/ seller to provide an commodity of a certain type, at a time and a price, and in the quantity required by a known and committed buyer”.

Basic elements of Contract farming

Contract farming mainly involves the following basic elements

·   Pre-agreed price
·   Quality
·   Quantity or Acreage (minimum/maximum)
·   Time

Ø      Bank’s Initiative in Contract Farming :

à  The Bank has extended financial assistance to the farmers by entering into tie-up / contract farming arrangement with reputed companies / Govt. agencies for various crops like

·   Sugarcane for sugar mills
·   Cultivation of Eucalyptus and Casuarina for Wood Pulp for paper industry
·   Cultivation of Bio-oil Crop - Jatropha for oil extraction
·   Mango for processing
·   Oil Palm for extraction of palm oil
·   Gherkins for export
·   Seed Cotton & Agri. allied activities like Dairy (Govt. & Private Dairies), Poultry etc.

This effort will benefit the farming community with assured market and reasonable price for the produce and will increase productivity and profitability in Agriculture, besides promoting better opportunities and prospects in Agro-processing sector.