EFFECT ON INCOME AND CONCEPT OF INCLUSIVE MARKET DEVELOPMENT (IMD) THROUGH CONTRACT FARMING IN BANGLADESH

Abstract

The present study was designed to analyze effect on income and inclusive market development (IMD) through contract farming. The main objectives of the study were to explore contract farming as a tool of IMD, its role in increasing income and make a comparison between contract and non-contract farmers for the same crops. Primary data were collected from Belabo Upazila of Narsingdi district. To serve research objectives, one hundred non-contract bean growers, sixty contract bean growers were selected from the study area. The total production of bean was higher for contract farmers (18897.5 kg) than that of non-contract farmers (12893 kg) and the total volume of sales was higher for contract farmers (18707.63 kg/ha) than that of non-contract farmers (12600.81 kg/ha). The contract farmers get more price (Tk. 17.26 /kg) for their products than that of non-contract farmers (Tk. 16.56 /kg). Therefore, profit was undoubtedly more in the case of contract farmers. The majority of the contract farmer agreed that contract farming increased their income and productivity, improves product quality and living standard. Lack of incentives, lack of commitment, limited government support, poor infrastructural facilities, less bargaining power of farmers, weak law enforcement, and lack of monitoring were the major problems faced by contract farmers. The study also suggested some recommendations to improve the present situation such as adequate infrastructure, adequate government support, strong law enforcement, price reduction, the establishment of standard vegetable packaging industries, and standard cold storage.