Vertical linkage was strong between the seed
companies and contract farmers. There was a written
contract agreement between farmers and companies.
Companies provided parent seed and extension services
to the farmer. The farmers paid only for the seed cost,
whereas the extension services were made available
free of cost. In the agreement, the contract farmer had
to deposit ` 700/ acre as security money. After harvest,
farmers sold the raw cobs to company (` 875/q in 2010-
11). In case of breach of contract by the farmer, he
loses the security money. Seed companies have the
forward linkages also with the distributors/wholesalers.
Company supplies the seed as per the prior demand to
their registered distributors. Down the value chain,
distributors in turn supply the seed to their dealers/
retailers.