Impact of contract farming on basmati rice (Oryza sativa) in India

Abstract

India is world's second largest producer of rice and largest exporter of basmati rice in the world. Total paddy production in the year 2018-19, was 115.6 million tonnes and basmati rice output was 5.31 million tonnes. Basmati rice export is projected to hit a record level of `₹ 30000 crore or nearly $4.28 billion this season. The largest exported basmati variety is Pusa 1121 and the procurement price was `₹ 35000-38000 a tonne in the year of 2018-19 which was 8.5% higher than the price in 2017-18. A study was undertaken to analyse the contract farming dealing with Pusa Basmati 1121 and its economic impact on farmers in Ghaziabad district of Uttar Pradesh during 2017-18. The findings of the study reveal that the impact of contract farming on yield of basmati rice was found to be positive. The total income was more for contract farmers than non-contract farmers. Total input costs were slightly higher on contract farm than non-contract farm. Major factors responsible for farmers’ participation in the contract farming were found to be company guidance for scientific method of cultivation, higher price for produce received from contracting firm, assured purchase by contracting firm and age of the farmer. It is suggested that agricultural marketing and agri-business system needs institutions and innovations, to create and develop different marketing strategy for further increase in agricultural production.