Question
Explain contract farming and also highlight its advantages.

Answer

Contract farming-explanation and advantages:
  • The farmer enters into a contract with a company.
  • The company Identifies the crop to be grown.
  • The seeds are provided by the company.
  • The know-how, and many times the working capital is also provided by the company.
  • The assurance to the farmer that his produce will be bought at a predetermined price is given by the company.
  • Commonly practised for special products like grapes, figs, pomegranates cotton etc.

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