Contract farming is a contract between the farmer and the client or big firms, etc. These big firms demand a certain crop, quantity of crop, and quality, which is fulfilled by the farmers. In return, companies agree to buy the product. Companies get a source of raw material; farmers get a buyer without the stress of finding a market to sell the produce.

The farmer (producer) and company (the buyer) sign a bond or agreement which states all the important terms and conditions. In this type of farming, small farmers do participate. In this article, we will understand all the opportunities and risks for a small-scale farmer in contract farming.

Opportunities for Small Farmers

One of the key factors for every successful business is calculative decision-making, expertise in the sector. In order to get expertise, you need to understand the opportunities we can have as a farmer in contract farming.

Risk-Free Pricing for Produce

Before manufacturing, you need to think of the demand for the product as well as find the market for the goods. But in contract farming, you will already have a predetermined quality, quantity, price as well as buyer of the good before you start planting. This helps the farmer eliminate most of the stress.
The price, quality, and quantity are decided as per the need of the firm or buyer.

Hence, if as a farmer you have cultivated the right type of produce—that is, the product meets the quality standards which were predetermined—then you will gain a lot of profit and the risk of uncertain market prices will be avoided.

Training and Support

Companies do tend to give different kinds of support to the farmers, such as they provide farmers with training and inputs for efficient farming. They are given detailed training on using modern methodologies and farming techniques, pest control, etc.

Lack of Financial Risk

In contract farming, some companies also offer advance payments, as this assures the farmer that they are in the right place. Also, financial help for all the pre-harvest expenses. Some companies may provide credit support to the farmer. Due to this financial help, the farm debts are reduced as there’s no need for them to take loans from banks or moneylenders.

Quality Produce

Companies usually have certain metrics for the quality of crops. The farmers need to meet that quality, which will be set while signing the agreement or contract. This helps the farmer to produce premium quality produce. This also has high value in the local market if left out, thus opening new sources of income besides contract farming.

Risks for Small Farmers

Now we will be looking into the other side of the coin—these are the risks of contract farming which a small farmer may face. These risks can be dealt with or avoided by the right knowledge and calculative steps.

Legal Problems

Usually, the small farmers are illiterate or less educated, and while signing a contract, they sign it with just understanding the basic stuff. It’s difficult for them to go in depth and understand each and every point, as contracts are complex with many hidden agreements which usually go unnoticed by the farmer.

Single Buyer Mindset

Once they get the hang of contract farming, there’s a high tendency that the farmer will depend only on the company to purchase. He/she won’t have another source of income except the buyer. Sometimes companies may back off or also delay purchase; this will affect the livelihood of the small farmer.

So, farmers need to have different sources of income and also need to have a backup plan or any other market where they can sell their produce.

Farmer Exploitation

Companies are more powerful or influential due to which they are dominant, and the contract usually leans towards them, due to which they get unfair advantages. This increases the risk of exploitation in the farmer’s case. Here, it is difficult for the farmers to negotiate. The companies have higher negotiating power than the small farmers, which could lead to exploitation.

There aren’t many government rules and regulations to prevent exploitation of the farmers. If the contract goes wrong and the company takes any legal action against the farmers, then it will be difficult for the farmers to come out of the problem due to lack of resources—monetary as well as knowledge.

Conclusion

First of all, we understand that contract farming has its benefits as well as risks, but in order to tackle the risks, you need to take calculative decisions and do proper research. For this, you need to connect with farmers who are doing contract farming for years. Understanding the problems they faced and how they tackled them will help you to gain experience as well as knowledge, and you can implement those steps and rules in the agreement.

There are various methods of farming, but ultimately, the primary goal is to grow crops for food. Some farming techniques result in higher yields, while others may produce good yields but could harm the environment. Certain methods are challenging to master yet are beneficial for the environment and sustainable; if practiced correctly, they can yield even better and higher outputs. One such method is Zero Budget Farming, also known as Zero Budget Natural Farming (ZBNF).

Zero Budget Farming

Zero-budget farming is a method of farming in which no external inputs are used, such as chemical pesticides or fertilisers. This isn’t any new method, but it is the traditional Indian way of farming.

The concept of zero-budget farming was popularised by Subhash Palekar in the 1990s. He stated that all the necessary nutrients for the plant’s growth are naturally present in the environment; hence there’s no need for chemicals.

The Core Principle of ZBNF

The following are the core principles of zero-budget farming.

Zero Budget

As the name itself suggests, there will be zero to little investment in farming. But how can the cost of farming be reduced by using natural resources that are already available in nature? No chemical fertilisers or pesticides are used. Mainly, cow-based products are used (for that, you need to have your own cows to actually have a zero budget).

Soil Revitalisation

It means treating soil as a living ecosystem, so you need to feed microbes that will grow and support plant growth. There are 5 ways by which you can revitalise the soil:

1. Jeevamrutha – Microbial Life Booster
   In this, a concoction is made up of many varieties of natural ingredients which are mixed and kept in shade for a few days to encourage microbial growth. This mixture is then added to the soil or the roots of the plants. This helps in improving the soil’s fertility.
2. Mulching (Acchadana) – Natural Soil Cover
   Mulch is a protective layer made from dried leaves, crop residue, or green manure. It prevents topsoil erosion, retains moisture, provides organic matter as it decomposes, and supports the growth of earthworms and microbes.
3. Whapasa – Balanced Moisture and Air
   Focuses on creating moisture + air conditions in the soil instead of flooding it. Frequent light irrigation is preferred over deep watering. Encourages better root growth and microbial activity.

No Chemical Inputs

In zero-budget farming, no chemicals are used; instead, natural fertilisers are used. Instead of pesticides, natural pest management is done, such as intercropping, where different kinds of crops are grown together, which will create an ecosystem that might help in pest management. Also, botanical extracts are used to control pests and diseases.

Indigenous Seeds

In zero-budget farming, no hybrid or exotic seeds are used as these will be expensive, and also they might not adapt to local climates and soil conditions. Indigenous seeds are used as they are resilient and can thrive in the local climates.

Integration of Livestock

Cows are the key component in zero-budget farming; their urine and dung are used to make Jeevamrutha or natural fertilisers for the farm. Indigenous breeds are mainly used as their dung and urine have higher concentrations of microorganisms compared to cross-breed cows.

Benefits of Zero Budget Farming

Zero-budget farming is highly beneficial to the farmer, as the cost is almost zero. Let’s understand the benefits of zero-budget farming in the following points:

Zero Production Cost

As most of the materials are naturally sourced and a lot of labour is involved, no machinery is used in this type of farming. There will be very little to no cost of production. Hence, all are natural and organic with no pesticides and chemicals.

Improved Soil Health

As no chemicals are used, and they are the main cause of degradation of soil health. As mostly natural ingredients such as cow dung, urine, kitchen waste, etc., are used, all these traditional but effective techniques will help in increasing the fertility of the soil without harming soil health.

Minimal Dependency on External Inputs

As we need zero budget in this type of farming, there’s rarely any use of machinery; instead, all traditional tools are used in this type of farming. All naturally available materials are used.

How fascinating is it that we can do farming or earn ourselves food without any expensive tools?

Sustainable Farming

As there’s no chemical washing off the soils and running into and ruining the river water, damaging the natural structure of the ecosystem, this will be prevented. Hence, the long-term benefits are high as they don’t harm the ecosystem. Encouraging the natural cycle of nutrition and growth.

Organic Farming

The best part of this type of farming is that there is zero use of chemicals. Whatever you produce is totally organic and really healthy vegetables as compared to all those vegetables that are coated with a layer of chemicals. These chemical vegetables are shiny and beautiful, but they are filled with harmful chemicals, which should be avoided at all cost.

Challenges of Zero-Budget Farming

As we have seen how glorious, chemical- and budget-friendly this type of farming is, in order to do zero-budget farming, you need to have a good amount of knowledge, and the yield will be less in the initial days. It also has a few challenges which can easily be overcome:

Difficult Farming Method and Training Gap

This type of farming method is difficult to follow, as usually chemicals are quick fixes to any solution, whether it be pests or fertilisers. As we won’t be using any chemicals, and instead we are following the natural way, it will take some time for your soil and you yourself to get used to this type of farming. You need to have a good amount of knowledge so that you can create a whole ecosystem for your crops, from pest management to cows, their dung and urine, to making natural fertilisers.

Labour Intensive

This type of farming is highly labour intensive, from preparing soil by adding all the natural fertilisers, manure, and compost, to taking care of the cow dung etc. This method might not show results or higher yields in the first year itself; instead, it will take some time to tackle all the problems naturally.

Lower Yields

In this method, it might not show results or higher yields in the first year itself; instead, it will take some time to tackle all the problems naturally. As every farm has its own ecosystem, they will require the solutions according to the location, soil, etc. So, there is no standard method of farming; instead, you need to understand the area, all the natural resources available nearby, and how to use them effectively without harming nature.

And it will take a few months to years for you to be fully equipped with the kind of knowledge in order to produce good yields.

Zero-budget farming demands a solid understanding of natural farming, patience, and community support. It is one of the eco-friendly agricultural methods, but implementing it effectively requires significant hard work to achieve good yields.

Once you discover the right approach to farming, you can expect high-quality and cost-effective yields. As a farmer committed to natural or zero-budget farming methods, you are likely to experience improved soil health, cost savings, and long-term success through persistence and dedication.