CONTRACT FARMING
Partnerships for growth

FAO
AGRICULTURAL
SERVICES
BULLETIN

145

Download pdf -648 kb

by
Charles Eaton
and
Andrew W. Shepherd

The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

ISBN 92-5-104593-3

All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes are authorized without any prior written permission from the copyright holders provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for such permission should be addressed to the Chief, Publishing and Multimedia Service, Information Division, FAO, Viale delle Terme di Caracalla, 00100 Rome, Italy or by e-mail to [email protected]

© FAO 2001

CONTENTS

Acknowledgements and references

Chapter 1
Advantages and problems of contract farming

Advantages for farmers

Problems faced by farmers

Advantages for sponsors

Problems faced by sponsors

Chapter 2
Key preconditions
for successful contract farming

The enabling and regulatory role

The developmental role

Chapter 3
Types of contract farming

The centralized model

The nucleus estate model

The multipartite model

The informal model

The intermediary model

Chapter 4
Contracts and their specifications

The legal framework

The formula of contracts can be based on ...

The specifications may include ...

Examples of contracts
are referred to in this Chapter
and given in the Annexes.

Chapter 5
Managing the project

Coordinating production requires advance ...

Managing the agronomy involves ...

Farmer-management relations can be maintained and strengthened by paying attention to ...

Chapter 6
Monitoring performance

Monitoring quality and yields

Monitoring human resources

Protecting the environment

Glossary
References and further reading

FIGURES

1. A contract farming framework

2. The centralized model

3. The multipartite model - A joint-venture contract farming project in China

BOXES

1. Technology transfer by diffusion

2. Effect of assured markets - Tomato production in India

3. Analysing the physical and social environment

4. Culture versus commercialism

5. Sugar-cane production by contract farming in Thailand

6. Individual developers - The informal model

7. Intermediaries in Thailand

8. "Acts of God" clauses in contracts

9. Land tenure for contract farming

10. Transient verbal contracts

11. An example of grading specifications for fresh tobacco leaf

12. The role of farmer groups in Colombia

13. Growers' Association in Kenya

14. Management and technology transfer in India

15. Monitoring milk production in Croatia

TABLES

1a. Example of an inventory of preconditions for contract farming - Socio-political assessment

1b. Example of an inventory of preconditions for contract farming - Physical and social assessment

2. Characteristics of contract farming structures

3. Characteristics of contract formulas

4. Pricing and grading structure of cassava under contract in Thailand

5. A cropping schedule for flue-cured tobacco under contract

6. Production and postharvest matrix for export papaya under contract

A1. Response (Y) and explanatory variables (x) for CYI

A2. Calculated production yields versus actual production

ANNEXES