Explanation:

Contract farming can be defined as agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for the production and marketing of a farm product or products. Typically, the farmer agrees to provide agreed quantities of a specific agricultural product. These should meet the quality standards of the purchaser and be supplied at the time determined by the purchaser. In turn, the buyer commits to purchase the product and, in some cases, to support production through, for example, the supply of farm inputs, land preparation and the provision of technical advice.

Statement 1: It makes small scale farming competitive - small farmers can access technology, credit, marketing channels and information while lowering transaction costs. It gives assured market for their produce at their doorsteps, reducing marketing and transaction costs. It reduces the risk of production, price and marketing costs.

Statement 2: Contracting agreements are often verbal or informal in nature, and even written contracts often do not provide the legal protection in India that may be observed in other countries.

There is no dedicated law or regulation in India concerning contract farming.

Lack of enforceability of contractual provisions can result in breach of contracts by either party.

Statement 3: Contract farming will make sure that the contracting party will purchase all the produce at a predetermined price. The MSP operations are organized independently of such contracts, and state agencies do not necessarily purchase all the farm output at MSP in India.

Statement 4: Contract farming can open up new markets which would otherwise be unavailable to small farmers because the corporate or contracting party might otherwise not purchase from those farms. It also ensures higher production of better quality, financial support in cash and /or kind and technical guidance to the farmers. In case of agri-processing level, it ensures consistent supply of agricultural produce with quality, at right time and lesser cost.