Answer Book question
A promoter sells you inputs. chicks, fingerlings, saplings, seed. and promises to buy the output at a fixed price. In principle it removes market risk. In practice the promoter controls input price, output price, quality rejection and payment timing, and can disappear. Trust only a buy-back with a written contract, verifiable finances, independent references, and a price that survives comparison with the open market.
A promoter sells you inputs. chicks, fingerlings, saplings, seed. and promises to buy the output at a fixed price. In principle it removes market risk. In practice the promoter controls input price, output price, quality rejection and payment timing, and can disappear. Trust only a buy-back with a written contract, verifiable finances, independent references, and a price that survives comparison with the open market.
A contract-farming scheme for a medicinal crop promises buy-back at a premium. Farmers plant. At harvest, the promoter rejects half the crop on "quality," pays late for the rest, and then closes. The open-market price for the crop is a fraction of what was promised, because there is almost no open market.
Buy-back concentrates all risk in one counterparty. Genuine contract farming with established processors exists; promoter-run buy-backs for novel crops with no open market are where families lose.
Written contract with quality specs and payment timelines Promoter's financial standing and history Independent farmers paid on time for two or more seasons Open-market price for the crop as a fallback Input pricing vs. open market Whether the promoter profits mainly from selling inputs
Signing on the model-farm visit.
Kerala has seen repeated buy-back failures in exotic crops and livestock. The pattern repeats because each new crop looks different.
Promoter profits ₹2 lakh on inputs to 50 farmers before any buy-back is due. If the buy-back fails, the promoter has already won.
Established processors and cooperatives running contract farming for mainstream crops are a different thing; verify them too.
Get the contract Check the promoter's track record Find the open-market price
How do I verify a farming promoter's claims?
Agriculture
Kerala Agricultural University (KAU) Package of Practices and extension bulletins · ICAR institutes: CPCRI (coconut), IISR (spices), CTCRI (tuber crops), CIFA/CMFRI (fisheries) · Kerala Department of Agriculture and Krishi Bhavan scheme documents · NABARD and bank agri-lending norms · Kerala Rising verifies every yield and cost figure against institutional data; promoter claims are not sources Rates, limits and whether you may qualify change. Confirm with the official source.
Ask Kerala Rising: Before you buy the stock, the tank or the saplings, send us the promoter's numbers. We will put them next to KAU and ICAR data and tell you what the gap looks like. com Kerala Rising › Agriculture · Agriculture 4
This page is general orientation, not personal insurance, investment, medical, legal, lending, tax, or professional advice. Rules, rates, benefits, and claim or application decisions can change. Confirm the current position with the named official source and use a licensed or qualified professional where your situation requires one. Kerala Rising does not decide whether you may qualify, approve claims, or promise an outcome.