Key Benefits of Contract Farming
The key benefits of contract farming for farmers can be summarized as: 1) improved access to local markets; 2)assured markets and prices (lower risks) especially for non-traditional crops; 3) assured and often higher returns; and 4) enhanced farmer access to production inputs, mechanization and transport services, and extension advice
Additional key benefits for contract partners and rural development often include: 1) assured quality and timeliness in delivery of farmers’ products; 2) improved local infrastructure, such as roads and irrigation facilities in sugar outgrower areas, tea roads, dairy coolers/collection centres, etc. and 3) lower transport costs, as coordinated and larger loads are planned, an especially important feature in the case of more dispersed producers.
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