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Contract Farming is defined as “an agreement, oral or written, between farmer or farmer groups and processing and/or marketing firms, commercial or otherwise, for the production and supply of agricultural products under pre-specified conditions, frequently at predetermined prices. The arrangement could also involve the purchaser providing a degree of production support through, for example, the supply of inputs and the provision of technical advice. The basis of such arrangements is thus a commitment on the part of the farmer to provide a specific commodity in quantities and at quality standards determined by the purchaser and a commitment on the part of the company to support the farmer's production and to purchase the commodity”. Through contract farming, the farmer gets the required assistance in the form of quality inputs, extension services, and the assured market for their output, while the company gets the assured supply of raw materials. Such inter-linked input and output markets contracts can generate efficiency gains that can be shared between farmers and firm
