Small farmers in this day and age are facing threats and challenges in their livelihood. Accessing markets is more difficult nowadays and this will prevent farmers to earn profit for their hard work. That’s why it’s so important for them to have constant customers, especially companies that supply food or work in food processing, that they can partner with for them to become the main supplier for their customers. Customers can also benefit from the partnership as having a reliable source of produce for their line of work.  To officialize the partnership, a written contract or agreement must be made between the two for them to fulfill certain conditions and protect themselves legally if any dispute may arise, especially if the partnership is a long-term commitment. This practice is called contract farming. This article will explain how to create a contract farming agreement.

6+ Contract Farming Agreement Samples

1. Contract Farming Agreement Template

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2. Contract Farming Labor Contractor Agreement

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3. Contract Farming Labor Services Agreement

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4. Contract Farming Agreement

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5. Contract Farming Forage Cropping Agreement

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6. Contract Community Farming Agreement

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7. Contract Lease Farming Land Agreement

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What is Contract Farming?

Contract farming is an agreement that involves agricultural production between the buyer and farm producers. It mainly involves the buyer specifying the quantity and quality required of the agricultural products and with the farmer agreeing to supply and deliver the products at a set date and setting a specific price for crops and other produce. In other words, it is just a contract of sale between the buyer and the farmer. Aside from financial help, some buyers provide other support such as technical support and inputs to improve the efficiency of the farming work and the quality of the produce.

Details to Include in a Contract Farming Agreement

1. Introduction

The first part of your contract is where you need to state who’s involved with the agreement. It must include the date of when the contract is written, the customer’s name and your name as the farmer, and both of your business addresses.

2. Definition

This section is where the agreement will identify the terms of the contract. It identifies the stipulations of the agreement.

3. List of  Farmer’s Obligations

Some examples of the usual  farmer’s obligations are:

  • Collection of produce
  • Organize its members to produce and deliver indicated produce on a timely basis
  • Plant horticultural crops based on the agreed produce, its type, and quality
  • Determine the number of crops to be delivered  on a set delivery date and their price per kilogram
  • Follow practices and procedures necessary to the production of high-quality products for the export market
  • Document group and individual farmers deliveries and maintain suitable records to facilitate group and members’ payments

4. List of Customer’s Obligations

The responsibilities of the customer must also be laid out in this section. Below are some examples that identify their obligations:

  • Mobilize farmers into production groups
  • Provide training support to farmers
  • Provide technical assistance to effectively produce more crops/livestock
  • Help manage the production groups

5. Risk Management

This section must outline your strategies for handling unexpected risks such as cases of extreme events like high market prices or bad weather, and the steps you will take to adjust to those cases.

4. State Your Cancellation Terms

Your customer or you might face some issues that will prevent you from completing your obligations in your contract. To protect each party, including the terms regarding cancellation of some obligations or delaying some obligations. State the terms clearly and make sure those are sensible enough for everyone in the party to understand and agree on.

5. Finalize Your Contract

Conclude the contract with signature lines where you and your customer can write both of your names and signatures and note the date when the contract is signed by both of you.

FAQs

What are the advantages of contract farming?

The advantages of contract farming for farmers are:

  • Production services are supplied by the sponsor
  • It introduces new technology and also enables farmers to learn new skills
  • Farmers’ price risk is reduced since the contract already specifies prices
  • Contract farming opens up new markets opportunities to small farmers

What farm animal is most profitable?

Beef cattle are considered the most profitable and easiest livestock to raise for profit because beef cattle are mostly in demand anywhere and they only need good pasture, supplemental hay during the winter seasons, freshwater, vaccinations, and plenty of room to roam for them to thrive. Furthermore, buying calves from dairy farms is inexpensive so it is easier to start raising cattle.

What are the easiest farm animal to raise?

The easiest farm animals to raise in large quantities are chickens, cattle, goats, turkeys, pigs, rabbits, honey bees, and sheep.

Once you’re done drafting the agreement, make sure to review it first and check to see if there are any errors or wrong information being input. Discuss it first with your customer and reach a mutual agreement with the contents of the contract first before signing it. Make sure the contract is flexible and provide clear, simple instructions for both parties to understand completely and agree on without any confusion. By being transparent, you can create a long-term partnership with your customer.  To help you get started making the contract for your farming services, download our free sample templates above to use as your guide!

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