Contract farming can be a growth driver for economy

FE Team | Published: February 22, 2024 21:35:38

Contract farming that made some tiny ripples around a decade back has resurfaced with renewed interest in it. A FE report says that with the offer of sizable land from an African country, the government is giving a fresh look at farming in foreign soil on contractual arrangements. It was way back in 2010 when for the first time a fact-finding mission visited few countries in West Africa to explore prospects of contract farming. Later, in 2016, there was reportedly another move but despite some progress made, that did not materialise. It has transpired from the FE story, as it quotes foreign ministry sources, that Uganda has agreed to provide Bangladeshi entrepreneurs twenty thousand hectares of land for cultivation purposes. This, according to experts and interested quarters, may lead to further exploration in the field in some other neighbouring countries.
Contract farming refers to the practice where agricultural production is carried out on the basis of agreements between farmers and agribusiness firms, typically located in different countries. This arrangement involves farmers producing crops or livestock according to predetermined terms set by the contracting companies. These terms often include specifications on the type of crops to be grown, production techniques, quality standards, pricing, and sometimes even supply of inputs such as seeds and fertilisers.
Contract farming abroad can provide numerous benefits, such as access to markets, technology transfer, assured incomes for farmers. However, it also raises concerns about equity in the distribution of benefits. Additionally, contract farming often involves navigating complex legal and regulatory frameworks across different jurisdictions, including issues related to land ownership, money transfer, environmental regulations etc. Cultural and socio-economic factors also play a significant role in shaping the dynamics of contract farming arrangements, with considerations such as land tenure systems, labour practices, and community relationships impacting the success and sustainability of such ventures. Despite these challenges, when implemented transparently and responsibly, contract farming abroad has the potential to contribute to food security, agricultural development, and global economic integration, fostering partnerships that span continents and drive innovation in the agricultural sector. Therefore, careful regulation and monitoring are essential to ensure that contract farming arrangements abroad are fair, equitable, and mutually beneficial for all parties involved.
Some South Asian countries, notably India and Pakistan, have begun investing in agricultural ventures in East and West African countries. The allure of guaranteed income, increased employment opportunities for farm labourers, and the abundance of untapped arable land across the African continent serve as primary incentives driving these investments. However, for Bangladesh, the primary challenge lies in navigating win-win negotiations, particularly concerning issues such as securing hassle-free money transfers and ensuring fair employment opportunities for its migrant farm labourers. Bangladesh must address these concerns effectively to capitalise on the potential benefits of agricultural investments. If suitably worked out, these can be a prospective growth driver for the economy.