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Contract Farming of medicinal plant, process of contract farming
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Contract Contract Farming for Farming for
Medicinal Medicinal PlantsPlants
Present scenario of Present scenario of medicinal plantsmedicinal plants
Increasing popularity of Increasing popularity of medicinal plants medicinal plants
Unequal demand and supply ratio Unequal demand and supply ratio
Illegal harvesting of medicinal Illegal harvesting of medicinal plants from forestsplants from forests
Present scenario of Present scenario of medicinal plants- medicinal plants-
contd…..contd…..• In order to overcome this shortage In order to overcome this shortage
of supply and cater to the ever of supply and cater to the ever increasing demand, commercial increasing demand, commercial cultivation is most essential. .cultivation is most essential. .
• The superlative solution for the The superlative solution for the commercial cultivation of medicinal commercial cultivation of medicinal plants is contract farming. plants is contract farming.
What is Contract What is Contract farming?farming?
An Agreement between farmers and An Agreement between farmers and
processing and/or marketing firms for processing and/or marketing firms for
the production and supply of the production and supply of agricultural agricultural
products under forward agreements, products under forward agreements,
frequently at predetermined prices.frequently at predetermined prices.
Areas covered under Areas covered under contract farmingcontract farming
Market provisionMarket provision
Resource provisionResource provision
Management Management specificationsspecifications
Benefits to the FarmerBenefits to the Farmer Assured markets & returnsAssured markets & returns Risk elimination due to price Risk elimination due to price
fluctuationfluctuation Timely transportTimely transport Reduces exploitation from Reduces exploitation from
middlemenmiddlemen Reduces lending from private Reduces lending from private
money lendersmoney lenders Adequate input supplyAdequate input supply Employment generationEmployment generation
Benefits to the CompanyBenefits to the Company
Uninterrupted & Regular Flow Uninterrupted & Regular Flow of Raw Materialof Raw Material
Protection From Fluctuation In Protection From Fluctuation In Market Pricing.Market Pricing.
Long Term Planning Made Long Term Planning Made Possible.Possible.
Builds Long Term CommitmentBuilds Long Term Commitment Dedicated Supplier BaseDedicated Supplier Base Generates Goodwill For the Generates Goodwill For the
OrganizationOrganization
Contract concept Contract concept
A new concept ???A new concept ???
THE GOI HAD RUN THE GOI HAD RUN THE LARGEST THE LARGEST
CONTRACT FARMING CONTRACT FARMING MODELMODEL
THE GREEN REVOLUTION
And And today there is a need today there is a need
for such a revolution in for such a revolution in medicinal plants medicinal plants through contract through contract
farmingfarming
The first step towards The first step towards Contract farming of Contract farming of
medicinal plantsmedicinal plants
Reliance Life Science (RLS)
Dabur India Ltd.
Shortfalls in Contract Shortfalls in Contract farmingfarming
Small size of farmer landholdingsSmall size of farmer landholdings
Need to contract with a larger Need to contract with a larger numbernumber
Lack of a comprehensive crop Lack of a comprehensive crop insurance scheme to protect against insurance scheme to protect against natural calamities natural calamities
Key preconditions for Key preconditions for successsuccess
Government Support :-Government Support :- Suitable laws of contract and an Suitable laws of contract and an
efficient legal systemefficient legal system Awareness of unintended Awareness of unintended
consequences of regulation and consequences of regulation and avoid tendency to over-regulateavoid tendency to over-regulate
Provision of research and Provision of research and extensionextension
Take steps to bring together Take steps to bring together agribusiness and suitable farmersagribusiness and suitable farmers
Key preconditions for Key preconditions for successsuccess
Focus Agriculture Universities towards Focus Agriculture Universities towards developing crop and region specific developing crop and region specific agendas.agendas.
Introduce insurance policies to provide Introduce insurance policies to provide comprehensive coverage of the crops comprehensive coverage of the crops including loss of profit to the farmers.including loss of profit to the farmers.
Make it obligatory for Agricultural Make it obligatory for Agricultural Students to work on contract farming Students to work on contract farming programmes as a part of their programmes as a part of their curriculumcurriculum
Key preconditions for Key preconditions for Success- Contd..Success- Contd..
• Making purchase interference by a third Making purchase interference by a third party in a contract farming, a cognizable party in a contract farming, a cognizable offence. offence.
• Form a Registered Contract Farming Form a Registered Contract Farming Programme Programme
• Abolish all fees, taxes and duties on Abolish all fees, taxes and duties on procurement effected. procurement effected.
• Exempt taxes and duties on import of Exempt taxes and duties on import of agri equipments.agri equipments.
• Eliminate formalities in import of Eliminate formalities in import of varieties / hybrids.varieties / hybrids.
To sum up…..To sum up…..
Collaborative efforts of farmers, Collaborative efforts of farmers, companies companies
and the government in contract and the government in contract farming of farming of
medicinal plants will add to the over-allmedicinal plants will add to the over-all
socio-economic developments of socio-economic developments of nations. nations.