The era of globalization, the concept of „Contract Farming‟ is an effective way to co-ordinate
and promotes production and marketing in agriculture. “Contract Farming can be defined as an
agreement between farmers and processing or marketing firms for the production and supply of
agricultural products under forward agreements, frequently at predetermined prices.” The
advantages, disadvantages and problems arising from contract farming will vary according to the
physical, social and market environments. More specifically, the distribution of risks will depend
on such factors as the nature of the markets for both the raw material and the processed product,
the availability of alternative earning opportunities for farmers, and the extent to which relevant
technical information is provided to the contracted farmers. These factors are likely to change
over time, as will the distribution of risks.
The era of globalization, the concept of „Contract Farming‟ is an effective way to co-ordinate
and promotes production and marketing in agriculture. “Contract Farming can be defined as an
agreement between farmers and processing or marketing firms for the production and supply of
agricultural products under forward agreements, frequently at predetermined prices.” The
advantages, disadvantages and problems arising from contract farming will vary according to the
physical, social and market environments. More specifically, the distribution of risks will depend
on such factors as the nature of the markets for both the raw material and the processed product,
the availability of alternative earning opportunities for farmers, and the extent to which relevant
technical information is provided to the contracted farmers. These factors are likely to change
over time, as will the distribution of risks.
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