Food Processing and Contract Farming in Andhra Pradesh

This paper analyses various problems faced by the food processing sector in Andhra Pradesh, especially in instances of contract farming, with a focus on oil palm and gherkin. While contract farming has largely solved the problem of supply of quality raw material, cultivators of both crops have their own needs, which in some instances processors are unable or unwilling to meet. Oil palm growers, for instance, are keen on an assured minimum price while gherkin growers are totally dependent on export demand. Processors have also neglected the smaller farmers. Hence, some form of government intervention to ensure contracts are enforced and compiled with, is the need of the hour.