Abstract

Contract farming in India has emerged as a potentially transformative agricultural strategy, aiming to bridge the historical gap between smallholder farmers and agribusiness companies. This paper provides a comprehensive analysis of contract farming, exploring its multifaceted implications for small and marginal farmers in the Indian context. It examines the significant opportunities it presents, such as enhanced market access, access to modern inputs and technology, improved credit facilities, and the potential for increased income and productivity. Concurrently, the report critically evaluates the persistent challenges and disadvantages, including unequal bargaining power, lack of transparency in contractual arrangements, socio-economic disparities (such as gender inequality and child labor), and environmental degradation. The evolving policy and regulatory landscape, particularly the Model Agricultural Produce and Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018, is discussed in detail, along with its intended protections and observed limitations. Synthesizing empirical evidence, this paper argues that while contract farming holds considerable promise for modernizing Indian agriculture and boosting rural development, its actual impact is highly heterogeneous. Achieving inclusive and sustainable outcomes necessitates a robust regulatory framework that moves beyond mere facilitation to actively safeguard farmer interests, ensure equitable power dynamics, and address the inherent social and environmental externalities.