When a more planned relationship is needed between production and trade, contract farming can become an important tool.
At the heart of contract farming is the producer and the buyer agreeing on certain matters before production starts and planning the process together.
Supply planning starts in the field
Planning in advance how much of a product will be produced, when it will be harvested and which quality characteristics will be targeted can help make the supply process more predictable.
This approach is especially important for businesses that need regular quantities of product.
Rather than searching the market after harvest, being part of the plan from the start of production can allow supply risks to be managed better.
It is also a planning opportunity for the producer
Contract farming is not just a method used to meet the buyer’s needs.
It can also make production planning more predictable for the producer. Discussing in advance which product will be produced, in what quantity and with what characteristics can help the producer plan the season.
But for this to work well, open communication and mutual trust are needed between buyer and producer.
In organic production, things are a little different
In organic production, the relevant organic production rules must also be considered alongside production planning.
Matters such as the inputs used in production, the condition of the production area, and inspection and certification processes are important parts of the organic supply chain.
That is why organic contract farming is not simply a commercial agreement along the lines of “produce this quantity”.
The production process must be carried out in line with the requirements of the organic system.
The relationship matters as much as the contract
An agreement made on paper does not by itself create a successful supply relationship.
It is necessary to stay in touch with the producer throughout the season, follow developments in the field and assess any changes that arise in good time.
In agriculture, conditions may not be the same every season. Climate, yield and production conditions can change.
That is why a good contract farming relationship rests not only on the clauses of the contract, but on the parties being able to manage this variability together.
It builds long-term supply relationships
When applied correctly, contract farming can grow into a long-term producer relationship beyond a single harvest.
The producer gets to know the buyer’s expectations better, and the buyer gets to know the real conditions of production better.
This mutual understanding can help plan product quality and continuity of supply better.
At Biosmyrna, we value looking at producer relationships beyond short-term buying and selling. In the areas where we carry out contract production, our aim is not just to source products, but to build a sustainable relationship between production and trade.
Because a reliable organic supply chain starts to be built not on the day the product enters the warehouse, but on the day the production decision is made.
