Contract Farming and Its Impact on Rural Society, Health and Environment:

The Case of Tobacco Farming in Bangladesh

Abstract

Contract farming has long been practiced in both developed and developing countries with the aim of increasing agricultural productivity and ensuring the smooth functioning of the agricultural value chain. While the economic impact of this arrangement is better understood, its bearing on society and the environment has received scant attention in recent literature. This gap in understanding leads to a new contract farming research agenda: how to promote contract farming that minimises social and environmental impacts while maximising economic outcomes. To achieve this end, we need to better understand the socio-environmental impacts of contract farming arrangements. This research contributes to this understanding, focusing on tobacco farming in Bangladesh. Tobacco cultivation is mainly practiced through a contract farming arrangement, which is now the second largest agricultural practice in Bangladesh. Data for this research were collected using multiple qualitative tools from several stakeholders in the Kushtia district, including contract growers, key informants, and local government officials. The findings indicate that while this contract arrangement enables farmers to earn higher incomes, it simultaneously generates adverse socio-environmental consequences. The findings will help policymakers adopt measures aimed at minimising social and environmental impacts while maximising economic outcomes.