This can include things like the type of seeds to be used, the fertilizers and pesticides that are applied, and the expected yield. In the case of mahogany tree contract farming, it would involve farmers agreeing to grow and cultivate mahogany trees according to the specifications of the buyer or processor, who may be a company that produces wood products or a supplier of wood for other industries. Contract farming can provide stability and predictability for farmers by giving them a guaranteed market for their crops, and it can also provide benefits for buyers by ensuring a consistent supply of raw materials.
There are several disadvantages of contract farming in India that have been identified by researchers and policymakers & the solutions from Mahargh Agribuilder.
These include:
Lack of bargaining power:
All farmers may not have the same bargaining power as large corporations or agribusinesses, and may be forced to accept unfavorable terms in contracts. WITH MAHARGH, farmers do not need to worry about it as the agreement with mahargh is framed in such a manner that it favours both. The farmers and the company.
Dependence on a single buyer:
Contract farming often involves small farmers becoming dependent on a single buyer, which can leave them vulnerable to price fluctuations and other risks.
WITH MAHARGH, this disadvantage is turned into BIGGEST ADVANTAGE. Mahargh is not the only buyer. It brings in lot of buyers. Gets its farmers the best rates. In addition to this, Mahargh is through the process of acquiring its Exim licenses.
Limited access to credit:
Small farmers may have limited access to credit and other financial resources, which can make it difficult for them to invest in the inputs required to meet the terms of a contract. With MAHARGH AGRIBUILDER, the farmers can always be relaxed about this. Mahargh is not in hurry to earn. It wants farmers ro earn first and then comes its own income.
Limited access to information:
Small farmers may not have access to the same level of information as large corporations or agribusinesses, which can make it difficult for them to negotiate fair contracts or to make informed decisions about their farming practices. MAHARGH AGRIBUILDER runs this separate blog and a separate website “www.mahargh.com” to keep its and other farmers updated with latest news and advancement.
Risk of disputes:
There is a risk of disputes arising between small farmers and buyers under contract farming arrangements, which can be costly and time-consuming to resolve. MAHARGH AGRIBUILDER has neat & clean policy agreement. Dispute are very less likely. Because “farmers first” = Mahargh Services.
Limited scope for innovation:
Contract farming may limit the scope for innovation and experimentation on the part of small farmers, as they may be required to adhere to specific production practices or requirements. The pain and hard work in innovation is taken up by MAHARGH AGRIBUILDER’S team. The farmers just need to follow. Further, we appreciate the valuable experiences and advices from our farmers.
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