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Characteristics and determinants of contract design of wheat seed farming in India: a basis of decision making
Author Shiv Kumar; Puran Chand; Dabas, J. P. S.; Harvinder Singh
Year 2010
Organization National Centre for Agricultural Economics and Policy Research (NCAP), New Delhi - India.
This study examines (i) the extent to which characteristics of contract design are responsible for differences between public and private contract designs, (ii) the comparative adaptability of the prevailing public and private contract designs, and (iii) the determinants of the public and private contract profiles in wheat seed farming in Haryana, India. Data pertaining to the year 2002-03 were collected from 80 farmers supplying wheat seed to the public sector and an equivalent number of farmers hooked to the private sector, as well as 160 non-contract farmers of wheat grain. Results indicate that the weaknesses in the contract profile of the public sector were strengths of the contract profile of the private sector whereas strengths identified in the contract design of the private sector were not reflected in the contract design of the public sector. The characteristics in the contract design of the private sector were more flexible, adjustable and quasi-formal, catering to the needs and requirements of the farmers, as compared to the contract design of the public sector. The common determinants of the public and private sectors were found to be the ratio of contract price and open market price, and the off-farm income of the farmers. These two drivers motivate the farmers to adopt contract wheat seed farming irrespective of the contract farming regimes. Land holding size was identified as a sensitive driver of the private contract farming model while the reimbursement of transport cost was identified as the driver of the public contract farming model.
Publisher Indian Journal of Agricultural Economics. 2010. 65: 4, 621-638. 15 ref.
Keywords contract farming. contracts. private sector. public sector. seed industry. seed production. wheat
Country India