ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Does Contract Farming Improve Farmers' Income and Efficiency?

A Case Study from Punjab

This study compares the economics of contract versus non-contract farming of potato and basmati paddy in Punjab, and finds that on average, contract farmers have better farm returns and resource use efficiency than non-contract farmers. However, the efficiency differentials between these two categories of farmers are less significant in the case of basmati paddy. What then is the sustainability of contract farming in basmati paddy, and should contract farming be promoted only for high-value, non-cereal and horticultural crops in agricultural crisis-stricken Punjab?

I gratefully acknowledge the comments of Sukhpal Singh of IIM Ahmedabad and S P Singh of IIT Roorkee, the contribution of my father, who made this fi eld research possible, and the suggestions of my husband Gurpreet Singh. I also thank the anonymous referee for comments and suggestions.

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