Can Firm–Farm Associations Solve the Crisis in Indian Agriculture? Observations from North India

Contract farming (CF) is considered as a tool to advance agriculture through commercialisation in many developing nations. Although a substantial body of literature shows the impacts of CF on farmers’ welfare, its effect on resource-usage efficiency is ignored. Using cross-sectional data from 754 wheat farmers, this study finds that farmers who collaborate with contracting firms are highly efficient than those who are working in non-contract farming (NCF). Furthermore, CF adopters are taking benefits in terms of better resource use efficiency and minimum market risk. However, the participation of marginal and small-scale farmers in CF is almost negligible. Thus, it is suggested that contracting firms should bring these farmers into the ambit of contracting system to uplift their well-being.