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Contract farming will promote agribusiness, ISEC study finds

Bangalore, Nov 19, 2012, DHNS:

A study by the Institute for Social and Economic Change (ISEC) has revealed that there are increased prospects for agribusiness and corporates to enter the horticulture sector if contract farming is promoted in the State.

The study, carried out by Pramod Kumar, professor and head, Agriculture Development and Rural Transformation Centre, ISEC, assessed the impact of the National Horticultural Mission (NHM) in Karnataka.

“Contract farming in horticultural crops needs promotion and therefore, the relevant Act needs amendment favoring written and legal contract between the corporate and small farmers. During research, we found that post-harvest crop management was completely lacking in the state. Besides, farmers stressed the need for warehouses and cold storage to protect the horticultural crops in the long run,” said Pramod Kumar.


The study was conducted in the districts of Bijapur, Bagalkot, Bangalore Rural and Tumkur from among a mix of small, marginal, SC/ST and female farmers growing grape, pomegranate, flower and aromatic and medicinal crops.

An additional area of 1.82 lakh hectares has been brought under horticulture in the State during the XI plan (2007-2012) because of NHM.  While both the area and yield growth rate increased after the introduction of NHM in case of fruits, the area growth declined while the yield growth rate accelerated for vegetables.

In regard to commercial flowers and medicinal crops, while area growth increased, yield growth declined.

According to the study, some 60 per cent of the farmers expressed the opinion that NHM helped generate employment opportunities through the expansion of area under horticulture, while a majority of the households said their income had increased after shifting to horticultural crops.

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