The increase in agricultural production was accompanied by a serious concern / What harm do contracts bring to natural resources?

Contract farming has spread with the promise of increased income and more reliable market access, but new research shows that this method of production can have consequences beyond the agricultural economy.

In a new study, researchers have examined the environmental consequences of contract agriculture; A method that by linking farmers to buyers and markets, can influence the way of production, consumption of natural resources and the future of agricultural activities.

The food production and supply chain consists of various components and each of these components can play a role in the development of sustainable agricultural methods. Since the 1970s, the production chain of agricultural products in developing countries and emerging economies has undergone fundamental changes. The increase in population, expansion of urbanization, higher income and change in people's food taste towards consuming more protein and more expensive products have increased the demand for agricultural products. On the other hand, the liberalization of the markets, the improvement of transportation, the advancement of information and communication technology, the development of biotechnology and the increase in the importance of standards and the possibility of tracking products have changed the structure of production and supply of agricultural products. In such a situation, agricultural production has become more dependent on the specific needs of the market and consumers than before, and contract agriculture has also prospered.

Contract farming is a commercial relationship between a company or buyer and a group of farmers. In this method, farmers agree with the buyer to produce a product with certain characteristics, quantity or quality, and in this way they can access more reliable markets, including some foreign markets. This method may reduce some of the problems of expanding sustainable production, such as higher cost, lower performance and difficulty in selling products produced with sustainable methods. However, increasing production and commercialization of agriculture can put more pressure on water, soil and land. If only increasing the amount of product and income is considered in the contracts, the probability of using more chemicals, intensive exploitation of the land and expanding the cultivation of a product increases. For this reason, investigating the environmental effects of contract farming is very important for providing food and protecting natural resources.

Syed Mohammad Jafar Esfahani, assistant professor of the Institute of Planning Research, Agricultural Economics and Rural Development, has conducted a research to identify the positive and negative consequences of contract agriculture on the environment. This research examines in simple language how the contract between farmers and buyers can affect farmers' knowledge and income, production rate, consumption of chemical inputs, land use, product traceability and environmental sustainability. In this study, the opportunities and threats of this production model have been put together to clarify under what conditions contract farming can help sustainable production and under what conditions it may harm natural resources and ecosystems.

The above study was carried out by the "systematic review" method. A systematic review means that the researcher collects, sifts, and compares related scientific studies based on a specific process to obtain a systematic picture of the available evidence, rather than conducting a fresh experiment in the field.

The review of numerous scientific articles showed that contract farming can have favorable consequences for the environment in ways such as increasing farmers' knowledge, raising productivity and income, and providing product traceability. Traceability means that the production path of the product and how the inputs are used can be followed. Buyer monitoring may also help ensure better compliance with manufacturing practices and reduce inappropriate use of chemicals. The higher income of contract farmers can provide the basis for learning and optimizing sustainable production processes.

In contrast, contracts that only encourage farmers to increase production may promote chemical consumption, intensive land use, and monoculture. Mono-crop cultivation means extensive allocation of land to a specific crop and can affect the dynamics of ecosystems and the rural landscape. The research results show that neglecting environmental considerations in contract farming may cause irreparable damages. Therefore, agricultural and natural resources sector policies should be formulated in a coordinated way.

The importance of these findings is that despite extensive studies on the economic effects of contract farming, few studies have investigated its consequences for the environment and sustainable agricultural methods. The relationship between agriculture and environment is two-way; Agricultural activity can affect the quality of water, soil and land, and on the other hand, reducing the quality of the environment also lowers the performance of farms and the amount of crop production. Therefore, short-term economic success will be worthwhile if the resources needed to continue production are preserved in the long-term. The continuation of contract farming is also dependent on the continued production of adequate quantity and quality, without the gradual destruction of basic resources.

There is no complete consensus among experts about the environmental effects of this method. A group believes that buyer monitoring and product traceability can reduce the use of chemical inputs. On the contrary, some believe that the incentive to increase production may lead farmers to use more of these inputs and ignore the environmental effects. The example presented in the research shows that contract farmers in Madagascar have helped to increase the fertility and sustainability of agricultural land by using fertilizer and compost. This example shows that the final result depends on the type of contract, the technologies used, the monitoring method and the level of attention to the protection of natural resources.

According to this study, minimizing adverse environmental consequences should be one of the main means of maintaining and sustaining contract agriculture. Continuous monitoring of the production process can ensure that the increase in yield and income does not come at the cost of land quality degradation or environmental damage. Policymakers and planners also need to create a coordinated framework between the two fields of agriculture and natural resources. Such a framework can prevent the indiscriminate consumption of resources and the spread of destructive methods while providing the possibility of benefiting from benefits such as farmers' access to the market, increasing income and improving productivity.

The scientific research article resulting from this research has been published in "Sustainability, Development and Environment Quarterly". This publication is affiliated with the Association of Environmental Experts of Iran and is published in cooperation with the Faculty of Environment and Energy of the Science and Research Unit of Islamic Azad University.