The existence of an appropriate legal framework is therefore essential to the successful implementation and long-term viability of contracted enterprises. A legal system is essential to help farmers and their buyers negotiate and develop contracts. It is also important to protect them from the risks that may arise when executing contracts, such as abuse. B power on the part of most to the negotiations or breach of contract. Strengthening farmers to improve their bargaining skills in contracts can dispel the potential for future misunderstandings. [7] Several countries have adopted guidelines and legislation to ensure fair contractual practices and to propose remedial measures for dispute resolution. [8] A Legal Guide on Contract Farming was developed in 2013/15 by the International Institute for the Unification of Privacy (UNIDROIT) in collaboration with FAO. [9] [10] Contract farming has been used for decades for agricultural production, but its popularity appears to have increased in recent years. The use of contracts has become attractive to many farmers, as the scheme can offer both a secure market and access to production assistance. Wage processing is also attractive to buyers who continue to look for products for sale throughout the value chain or for processing. Processors are the main users of contracts, as guaranteed delivery allows them to maximize their processing capacity.

[2] Contracts with farmers can also reduce the risk of disease or inclement weather and facilitate certification, as is increasingly demanded by advanced markets. There are also potential benefits for economies, as contract farming leads to economies of scale that, as Collier and Dercon say, „necessarily create a more dynamic agricultural sector. [3] Prowse (2012) provides an accessible and comprehensive overview of current issues of contract agriculture in developing countries. [17] Several studies have given a positive message about the inclusion of small farmers and the benefits they bring to participation.

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