Question

What are the benefits of contract farming?

Answer 1

Instructions:

• Explain the benefits of contract farming.

Solution:

• Big companies draw up contracts with farmers to produce particular crops. Once harvested, companies buy the entire harvest from the farmer at the price they initially agreed upon.
• Companies help these farmers financially in the initial stages of the contract. When these companies pay the farmers for the final product, they deduct money for the company's seeds and fertiliser inputs.
• They also advise on appropriate farming techniques to help the farmer get the best results. In some cases, experts from the company visit the farm and carefully monitor to ensure the crops are being grown under the conditions mentioned in the contract.