TEHAN (Tasnim) - Contract farming as
a motivating system can bring about a win-win game for all the stakeholders of
the agriculture as well as industry, Deputy Minister of Agriculture-Jihad
Hossein Shirzad said.
In a meeting of agro-economist and CEO of the national
unions of agro-cooperatives on "necessities of the contract farming",
Hossein Shirzad, who is also the CEO of the Central Organization for Rural
Cooperatives of Iran (CORC), said since CORC enjoys the appropriate legal
capacity, organizational chart and technical backup for contract farming.
The contract farming can be used by the rural and
agricultural network to create a symmetric symbiotic between agriculture and
industry, he added.
Referring to the outstanding achievements of using contract
farming in Europe, Latin America, North America and the Middle East, Shirzad
said that contract farming can bring about mutual profit, fair sharing of costs
and risks incurred by marketing, storage and selling of the crops for both
Recalling the experience of India, Kazakhstan, and France in
applying contract farming, the official asserted that improving contract
farming, however, requires making fundamental changes in the banking mechanism,
including the interest rate, loan-giving procedure, and guarantee.
"Nowadays, the dichotomy of subsistence farming and
industrial farming has diminished thanks to contract farming throughout the
world. The largest trade partners of rural cooperatives union in the developed
countries are the association of the grain exporters, big chain-stores,
hypermarkets, and food multi-national corporations and startups," Shirzad
Today 82% of Cucumis Sativus, 41% of Basmati rice, 38%
greenhouse tomato and red pepper, 25 % of peanut and 37% of hazelnut are
produced throughout the world by the contract farming. Meanwhile, the world
huge production of Durum wheat and more than 69% of certified seeds is due to
improving contract farming, he underlined.
He noted that In the Eurasia district, contract farming
means to select appropriate farms, employing professional labor force, using
qualified seeds, professional machinery and applying accessible and economical
inputs and transportation system, adding, “Accompanied by the supportive
pricing mechanism, applying these factors will lead to boosting farmers' income
and improving their living standards"
The development of contract farming is dependent upon
development of a modern pricing body that adopts an appropriate pricing policy
based on the cultivation pattern and land-use systems. Currently, the national
farming system suffers from the lack of such a reference body, Shirzad went on
Hence the crops are perishable in their very nature,
accessing emerging and sustainable markets necessitate creating a close link
and cooperation among farmers, food processors, and exporters, the deputy
Elaborating the advantages of the contract farming, Shirzad
added that by contract farming, farmers have no concern about price
fluctuations, they can focus on boosting yield, therefore the long term capital
raising and mid-term risk distribution will be facilitated.
“However, the agriculture system needs a supportive
judiciary system as well as an insurance system. We ask the parliament to
support all stakeholders by approving supportive Rules and Act for farmers.”