The impact of contract farming on the welfare and livelihoods of farmers: A village case study from West Bengal

Abstract

In many countries of the global south, Governments have recently encouraged neoliberal economic policies which have seen large corporations controlling more of the production process. Some studies have welcomed these interventions, arguing they provide enhanced welfare and income prospects for local farmers. Others have been more cautious, arguing they provide new landscapes of economic hardship for small farming communities, both for those contracted to the corporate chains and those that are not. This paper provides a case study of the impacts of the expansion of contract farming by PepsiCo on small-scale farmers in a small village in West Bengal, India. Through a series of detailed focus group and subsequent one-to-one interviews, we explore whether these local farmers are financially better off when tied to contracts with larger firms, whether they benefit from enhanced training and knowledge about better farming methods and whether they feel they are involved in genuine partnerships and the consequent implications for relationships around status, power and trust. The paper concludes that there are many concerns over contract farming some of which have not been discussed in the literature to date. The paper also reports on different types of coping mechanisms operated by small or marginal farmers, which in some cases, breaches the contracts made with PepsiCo.