Buyback Farming: A Contract Checklist

The price

• Is the price fixed, a minimum with a share of any higher market price, or a formula linked to a named market? It should be possible to calculate what you will be paid from the contract alone.
• Which quantity is covered: the whole crop from the contracted land, or only up to a limit?
• Who pays for transport from the farm to the collection point, and for bags and loading?

Quality and rejection

• The quality standard should be written in measurable terms: variety, moisture, size or grade, permitted foreign matter, and for organic crops the inputs that may and may not be used.
• Who grades the produce, where, and may the farmer be present? What happens to produce that is below grade: a lower price that is stated in advance, or rejection?
• Weighing should be on a certified scale with a receipt given at the time.

Seeds, inputs and advice

• If the company supplies seed, saplings, fertiliser or other inputs, are they free, sold at a stated price, or given on credit and deducted from the payment? Deductions should be listed with their amounts.
• What technical support is promised — visits, training, soil tests — and how often?

Payment

• How many days after delivery is payment made, and by what method? Payment into the farmer's own bank account leaves a record.
• Is there any payment if the company is late in collecting a perishable crop?

If the crop fails

Drought, flood, pests and disease are part of farming. The contract should say what happens to input credit and to the farmer's obligations if the crop is lost for reasons outside the farmer's control, and whether crop insurance is arranged and who pays the premium.

Your land stays yours

A buyback or contract-farming agreement is an agreement about the crop, not about the land. It should state plainly that ownership and possession of the land remain with the farmer, that no charge or lien is created on the land, and how either side may end the agreement. Where land is pooled or leased under a longer arrangement, the term, the payments, the conditions for exit and the state of the land on return all belong in the written document, and it is worth having it read by someone independent before signing.

Disputes and records

• The agreement should be in a language the farmer reads, signed by both sides, with a copy kept by the farmer.
• It should name how disputes are settled. Several Indian states have their own contract-farming rules and registration requirements, so ask which rules apply in your state.
• Keep every receipt: inputs received, quantities delivered, grades awarded and payments made.