Home » Profiles » Organic Farming & Contract Farming - Detailed Project Report, Profile, Business Plan, Industry Trends, Market Research, Survey, Feasibility Study, Investment Opportunities, Cost And Revenue, Plant Economics, Working Capital Requirement

Organic Farming & Contract Farming - Detailed Project Report, Profile, Business Plan, Industry Trends, Market Research, Survey, Feasibility Study, Investment Opportunities, Cost And Revenue, Plant Economics, Working Capital Requirement

Organic farming is primarily knowledge intensive whereas conventional farming is more chemical and capital intensive. This requires an active system to support farmer learning in order to address both the production and the post harvest requirements of organics. There are several complementary approaches to achieve this. Today, most of the market oriented organic farming is an arrangement, often contractual, between trading companies and farmers in which the companies are clearly dominant. Contract Farming (CF) can be defined as a system for the production and supply of land based and allied produce by farmers/primary producers under advance contracts, the essence of such arrangements being a commitment to provide an agricultural commodity of a type, at a specified time, price, and in specified quantity to a known buyer. Well managed contract farming is an effective way to coordinate and promote production and marketing in agriculture. Nevertheless, it is essentially an agreement between unequal parties: companies, government bodies or individual entrepreneurs on the one hand and economically weaker farmers on the other. It is, however, an approach that can contribute to both increased income for farmers and higher profitability for sponsors. Contracts are generally signed at the time of planting and specify how much produce the company will buy at what price. Often the firm provides credit, inputs, farm machinery rentals, technical advice and retains the rights to reject the substandard produce. Contract farming likewise affords potential benefits to governments. While the development of market linkages for farmers is traditionally viewed as a public sector responsibility, the establishment of the necessary agro services for a large number of small, unorganized farmers requires a considerable amount of public sector resources. On the other hand, contract farming provides market linkages in ways, which do not burden the public sector. Table below summarizes the main potential benefits In India, food supermarket chain growth including FDI in retail, international trade and quality issues like SPS, organic trade, fair trade, and ethical trade, promotion by the central and the state agencies, banking and input industry push for CF, farming crisis and reverse tenancy, and failure of traditional cooperatives, are likely help spread of CF across crops and regions as they provide new space to this arrangement in the context of withdrawal of state from agricultural space. It is found that CF gave much higher (almost three times) gross returns compared with that from the traditional crops of wheat, paddy and potato in case of tomato, and in cotton due to higher yield and assured price under CF. The studies of tomato CF in Punjab and Haryana, of cucumber in Andhra Pradesh and cotton in Tamil Nadu also found the net returns from these crops under CF being much higher than those under non CF situations though production cost in tomato was higher under CF.
Plant capacity: 3122 MT (Organic Production/Annum, Organic Basmati Rice, Wheat, Barley) Plant & machinery: 40 Lakh
Working capital: -T.C.I: Cost of Project : 271 lakh
Return: 22.45%Break even: 57.72%
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  • One Lac / Lakh / Lakhs is equivalent to one hundred thousand (100,000)
  • One Crore is equivalent to ten million (10,000,000)
  • T.C.I is Total Capital Investment
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  • Caution: The project's cost, capacity and return are subject to change without any notice. Future projects may have different values of project cost, capacity or return.


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