Contract farming seems to be the new buzzword in the farm sector. Since agro-based companies are barred from taking up crop cultivation on their own, contract farming seems to be the best option for them to get their raw materials custom-produced through farmers.
It is essentially a contractual relationship between the producers of farm products and their users (processors, exporters or traders) for the sale and purchase of agricultural produce outside the regular marketing channels.
This contract, oral or written, can be either directly between the farmer and the company or through some middle agency like a farmers
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