What Kind Of Farming Is Based On An Agreement

Even contracts that appear to be legally successful can face other challenges. For example, family relationships may be threatened. The work for contracts is often done by women, but the contracts are always in the name of the man who also receives the payment. Men attend meetings and trainings, but women often do not receive education. Land used by women for food crops or commercial production can be taken back for contract production. [6] This can have an impact not only on food production, but also on the status of women. Contracts can collapse due to mismanagement by the company or unrealistic expectations about farmers` capacity or yields. This has been a particular problem in attempts to promote contract farming for biofuel crops. [11] A 2015 episode of the 2015 U.S. television show Last Week Tonight starring John Oliver documented contract poultry farming in the United States, claiming that many farmers lived below the poverty line. [21] Contract farming must be economically viable.

To maximize profitability, companies need to select the best farmers available. Once the right farmers have been identified, it is necessary to build trust, as contracts only work if both parties feel they are better off because of their involvement. To do this, a willingness to cooperate and exchange information is necessary. Differences of opinion on product classification can be avoided, for example, by establishing clear and simple specifications in a contract and ensuring that farmers or their representatives are present when classifying products. Late payment can immediately lead to a breach of trust and should be avoided. Contracts must be flexible to take into account the possibility of extreme events such as high open market prices or bad weather. Finally, no matter how much the parties try, disagreements are inevitable. Ideally, contracts should provide for arbitration by a person acceptable to both the company and the farmers.

FAO`s Guideline for Responsible Contract Farming [12] provides concise guidance on how to maximize the chances of success for businesses and farmers. The role of producer organisations in negotiations on the interests of small farmers is particularly important. [13] Contract farming has been used for agricultural production for decades, but its popularity seems to have increased in recent years. The use of contracts has become attractive to many farmers, as the agreement can provide both a secure market and access to production support. Contract farming is also interesting for buyers who are looking for products to sell along the entire value chain or for processing. Processors are the main users of contracts, as the guaranteed supply allows them to maximize their processing capacity. [2] Contracts with farmers can also reduce the risk of disease or weather and facilitate certification, which is increasingly required by advanced markets. .