Contract farming has significant benefits for both the farmers and sponsors (investors).
Advantages for farmers/ Landowners :
- 1 )Inputs and production services are often supplied by the investor
- 2) Contract farming often introduces new technology and new skills reducing cost of agriculture
- 3) Contract farming can open up new markets reducing price risk for farmers/landowners and increasing profits
Advantages for Investors :
- 1) Saves huge investment in land
- 2) Gives access to profitable and 100% Tax-free income
- 3) Production reliability, quality consistency and shared risk
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