ATTITUDE OF BANANA FARMERS TOWARDS CONTRACT FARMING IN SOUTH GUJARAT, INDIA

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1 Indian J. Agric. Res.., 45 (4) : , 2011 AGRICULTURAL RESEARCH COMMUNICATION CENTRE / indianjournals.com ATTITUDE OF BANANA FARMERS TOWARDS CONTRACT FARMING IN SOUTH GUJARAT, INDIA Ruchira Shukla, Bhavesh Chaudhari, Yatin Patel and B.K. Dhaduk Institute of Agri-business Management (IABM), Navsari Agricultural University, Navsari , India Received : Accepted : ABSTRACT Contract farming is seen as a way to raise small-farm income by delivering technology and market information to farmers, incorporating them into remunerative new markets. The study was conducted in Narmada and Bharuch districts of South Gujarat with 30 banana contract farmers with the objective to assess their attitude regarding the contract system and its relationship with demographic variables. The study showed that the 6.67 per cent farmers have highly favourable attitude towards contract farming. Majority of respondents (76.67 per cent) have favourable attitude towards contract farming. Farmers agreed that contracting gives them better access to modern inputs, improves and encourages quality production and is a real boon to small farmers. However, farmers did not consider contract farming as the only best way to join farmers with markets and also disagreed that contract farming increases their awareness about consumer preferences. Attitude of farmers towards contract farming was found to be significantly negatively correlated with age and number of years in contract farming, while it was found to be positively correlated with the total landholdings and land under contract farming. The overall findings of the study strongly suggest the need for promoting the participation of small farmers in contract farming. Key words : Contract farming, Banana, Attitude. INTRODUCTION Banana (Musa paradisica L.) is one of the important fruit crops grown in India. India is the largest producer of bananas in the world with 23 per cent of the global production, which is estimated at 72.5 million tonnes. Maharashtra is the leading producer of banana followed by Tamilnadu, Gujarat, Karnataka and Andhra Pradesh. Banana is grown throughout the year and is well within the reach of a common man that s why it is called Poor man s apple. Gujarat is one of the largest producers of banana in India with districts like Anand, Surat, Vadodara, Narmada, Bharuch and Kheda contributing about per cent to the total banana production in the state. The productivity of banana in Gujarat, which is 42.7 MT per hectare, is much higher than the global average of 24.7 MT per ha. In South Gujarat, contract farming system for banana is followed in parts of Bharuch and Narmada districts. In , Narmada district had the production of banana amounting to 3, 37, 900 MT, while Bharuch produced 8, 82,222 MT of banana in the same year. Farmers from Jhagadia and Nadod talukas of South Gujarat are cultivating banana crop on contractual basis with few export oriented and domestic market oriented companies. Due to the efficiency (co-ordination and quality control in a vertical system) and equity

2 332 INDIAN JOURNAL OF AGRICULTURAL RESEARCH (smallholder inclusion) benefits of contract farming, it has been promoted aggressively in the developing world by various agencies (Glover, 1987). It basically involves four things - pre-agreed price, quality, quantity or acreage (minimum/maximum) and time (Singh, 2002). However, the terms and nature of the contract differ according to variations in the nature of crops to be grown, agencies, farmers, and technologies and the context in which they are practised. A sizable part of the farming community falls under the small and marginal farmers category in India. Contract farming, therefore, becomes increasingly important as it allows their agricultural produce to be purchased by multinationals, small companies, government agencies, farmers cooperatives and individual entrepreneurs. The present study examines the attitude of the banana contract farmers towards the working of the contract system and also determines the relationship between their attitude towards contract farming and their demographic characteristics. Therefore the present study was undertaken with the following objective: 1. To study the attitude of farmers regarding the contract system and its relationship with demographic variables in order to determine which factor influence most. MATERIALS AND METHODS The primary data was collected from contract farmers of banana crop in two districts of Narmada and Bharuch in South Gujarat. These districts were selected purposively for their high share in total area covered under contract farming for banana. The respondent farmers were selected randomly from villages (three villages from each selected taluka) wherein contract farming was in operation. A sample of total 30 contract farmers was drawn randomly with minimum 3 farmers from each village. The sample included contracting farmers with mainly two agencies operating in the region. The data were collected from these farmers by personal interview method using structured questionnaire. A special schedule using 5 point Likert scale was prepared to measure attitude of contract farmers. In the attitude scale total 16 statements including both negative and positive statements were arranged alternatively for checking each on 5 point continuum. To ascertain the attitude of farmers towards contract farming, the total score of each respondent was obtained by summing his score for individual statements. Total score of a statement was calculated by summing up the score given to that particular statement by all the 30 respondents. On the basis of total score of a statement, the statements were ranked. The mean score of respondents and mean score of particular statement was also calculated. The overall mean score was also calculated. These categories were made on the basis of mean and standard deviation of attitude scores as follows: Least favourable: Overall mean score - Standard deviation. Favourable: Between least and most favourable. Most favourable: Overall mean score ± Standard deviation. Correlation coefficient (r) was calculated for finding correlation between farmers profile and attitude of contract farmer and it was tested for significance. RESULTS AND DISCUSSION Attitude of farmers towards contract farming: Contract farming depends on the satisfaction of both farmers and firms, with profitability a key component. In the initial stage, farmers perceptions and their attitudes towards contract farming are important. On the basis of their mean score obtained and standard deviation, the respondents were categorised into three categories. It is evident from Table-2 that majority of respondents (76.67 per cent) had favourable attitude towards contract farming per cent farmers had highly favourable attitude towards contract farming however per cent farmers had less favourable

3 attitude towards contract farming in the region. The results of the present study confirm the findings of Kumar (2007) who reported that lately more farmers in India opted for contract farming due to positive attitude as a result of price protection on their crops. The results further strengthens by the findings of Mann and Kogl (2003), where they emphasized that bigger profits garnered through contract farming will be a catalyst for having more people to have a positive attitude and accept contract farming. Respondent s attitude towards contract farming was measured by farmers rating on a 16 item Likert type scale. The ratings ranged from 1 (Strongly disagree) to 5(Strongly agree).table-3 presents the mean score by statement in rank order as well as the overall level of attitude towards contract farming. The mean score of the items in the scale represent the farmers attitude towards contract farming. Results revealed that the farmers overall mean score for attitude scale was 3.5 indicating a positive attitude. Farmers rated the following three statements with highest agreement: Contract farming gives farmers better access to capital and modern inputs. ( 4.27), Contract farming improves and encourages quality production. (4.2) and Contract farming is a real boon to the small farmers. (4.03).The statements which received lowest agreement were: Contract farming increases awareness about consumer preferences. (2.87) and Vol. 45, No. 4, Contract farming is the best way to join farmers with markets (2.70). Relationship between the farmers characteristics and attitude: Studying the relationship between the characteristics of the respondents and their attitude was felt necessary for identifying the factors responsible for their relationship. Simple correlation coefficient was employed to assess the relationship. The results pertaining to this are presented in Table 4. The study revealed that there was a significant negative correlation (r= ) between age and attitude of farmers which implies that young farmers have more favourable attitude towards contract farming than the elder farmers. This could be attributed to greater awareness and realization of importance of contract farming by young farmers. This result confirms the study conducted by Toma and Mathijs (2007), who noted that age differences could also be an important determinant for attitude towards contract farming. This is consistent with a study completed by Norsida (2007) who found that there were significant differences between age groups concerning attitude towards contract farming. However, this contradicts the study by Akila and Chander (2009) who showed that age does not affect attitude towards contract farming. It was found that there was significant positive correlation (r=0.495) between attitude Table 1 : Selected Talukas, Villages and Sample Contract Farmers in Narmada and Bharuch District. Name of the District Name of the Taluka Name of the Village No. of Sample Farmers Narmada Nadod Vavadi,Gopalpura, Thadi 15 Bharuch Jhagadia Jhagadia, Ranipara, Karad 15 Table 2 : Distribution of respondents based on their attitude towards contract farming. Attitude Mean score Frequency Percentage Least favourable and below Favourable to Most Favourable Above

4 334 INDIAN JOURNAL OF AGRICULTURAL RESEARCH Table 3 : Attitudinal statements measuring the attitude of respondents. Attitudinal statements SA A UD DA SDA Total Score Mean score Rank Contract farming is a real boon to the III small farmers. Small farmers cannot be benefited by XI contract farming Contract farming is the best way of increasing the VI income and economic conditions of the farmers. Contract farming is exploitative IX Contract farming increases awareness about XIII consumer preferences. Contract farming takes away control and freedom IV of farmer over farm Contract farming improves and encourages II quality production. There is fear of violation in contract farming V Contract farming reduces marketing risk X Contract farming makes farmers mere price takers XI Contract farming gives farmers better access to I capital and modern inputs. Contract farming results in farmers total VII dependence over the companies Contract farming helps reduce cost of VIII production and marketing It is difficult to meet quality requirements under X contract farming Contract farming is the best way to join farmers XIV with markets Contract farming is not suitable in this region XII Total Note: SA Strongly agree; A Agree; UD Undecided; DA Disagree; SDA: Strongly disagree. and total landholdings. Farmers having larger landholdings were having more favourable attitude towards contract farming. This might be because contracting agencies prefer mostly large farmers for contracting as well as large farmers were in better position to meet the quality expectations as compared to small farmers. There was also a significant positive correlation (r=0.480) between land under contract farming and their attitude. Farmers having more favourable attitude towards contract farming had allotted large size land under contract farming. It was found that there was significant negative correlation (r=-0.489) between years in contract farming and attitude. It means that farmers attached newly have more favourable attitude than the farmers who are attached from long time. It was found that farmers expect higher prices and contracting agencies offer them stagnant prices which was the cause of concern. A report by the National Institute of Agricultural Extension Management, Hyderabad also says that the

5 Vol. 45, No. 4, contract farming is very promising in its early years. Farmers benefit from improved technology and higher productivity, quality and production. The contract price does not matter much in the early years. Once the farmers are confident of being able to deploy new technology, problems start cropping up. No significant relationship was found between attitude and variables such as education, family size, annual income and caste. CONCLUSION The study concludes that majority of farmers carry a positive attitude towards contract farming as it provides assured returns and a ready market. However, issues related to small holders participation, price determination and long term productivity must be paid attention. There is need to organize farmers into groups to increase their bargaining power. Moreover, farmers need to be educated about the importance of contract farming. Table 4 : Relationship between farmers characteristics and attitude. Demographic variables r value T value Education NS Age * Total Landholdings 0.495* Annual income NS Land under contract farming 0.480* Family size NS Years in contract farming * Caste NS * Significant at the 0.05 level; NS Non significant. Provision of incentives to agribusinesses that are embracing and promoting contract farming is paramount. The study calls for taking corrective measures to resolve the constraints since the model of contract farming has great potential and promise for ensuring assured economic returns in agriculture. REFERENCES Akila, N. and Chander, M.F. (2009). Attitude towards utilization of draught bullocks in Indian agriculture. Lives. Res. Rural Dev., 21: 1-5. Glover, D. (1987).Increasing the benefits to smallholders from contract farming: Problems for farmers organisations and policy makers. World Development, 15(4): Kumar, P. (2007). Resources Provision, Productivity and Contract Farming: A Case Study of Punjab. Paper Presented at ICAR-NCAP and USAID, New Delhi India. May 5-6, Mann, S. and Kogl, H. (2003). On the acceptance of animal production in rural communities. J. Land Use Policy, 20: Norsida, M. (2007). The Agricultural Community-50 years of Malaysian Agriculture. Malaysian Agriculture: Transformational Issues, Challenges and Direction. UPM Publisher, Serdang, Selangor. pp: Singh, S. (2002). Contracting Out Solutions: Political Economy of Contract Farming in the Indian Punjab. World Development, 30(9): Toma, L. and Mathijs E. (2007) Environmental risk perception, environmental concern and propensity to participate in organic farming programmes. Environ. Manage., 83:

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