AN APPRAISAL OF CONTRACT FARMING

Abstract

This article reviews the circumstances under which contract farming, as one form of vertical integration, is necessary to secure rapid and efficient co‐ordination and adaptability within systems of food production/marketing/distribution. A review of American experience and attitudes indicates that contracting in the U.S.A. has been successful in matching farm production to the needs of consumers more quickly and economically than otherwise would have been possible. Contract terms have generally been ‘fair’ to United States farmers, partly as a result of a strong co‐operative system, including a large number of bargaining co‐operatives, but also as a result of strong competition between American agri‐businesses. American experience and conclusions can be transposed to British circumstances.However, there should be greater publicity and analysis of contract terms, as well as more complete information on the financial performance of the agri‐business operations of conglomerates and other multi‐product businesses.