Comparative Analysis of Contract Farming in Iran in the Context of Enhancing Economic Efficiency and Sustainable Agricultural Development

Document Type : Scientific research

Authors

1 Assistant Professor, Department of Islamic Jurisprudence and Law, Faculty of Islamic Sciences and Research, Imam Khomeini International University (RA), Qazvin, Iran

2 Assistant Professor of the Department of Law, Faculty of Human Sciences, Damghan University

3 Associate Professor, Department of Islamic Economics, Faculty ofEconomic and Administrative Sciences, University of Qom, Qom, Iran

Abstract
Contract farming, as one of the modern tools in regulating economic relations between agricultural producers and buyers, plays a significant role in reducing production risks, increasing productivity, and ensuring food security. The findings of this study indicate that this institution is supported in many countries through codified laws and clear legal frameworks, whereas in Iran's legal system, a comprehensive and specific structure for it has not yet been developed. This article, in response to the question of the existing legal gaps in contract farming in Iran, hypothesizes that the absence of codified and transparent regulations has led to reduced legal security for contracting parties, increased disputes, and limited development of this institution. Using an analytical-descriptive method and a comparative approach, this research examines domestic and international regulations and concludes that drafting comprehensive regulations, strengthening legal protections, and leveraging successful global experiences can enhance the status of contract farming in Iran.

Keywords

Subjects

1. Agrivi. (2023). Contract Farming: A Way to Sustainable Agriculture. Retrieved from: https://www.agrivi.com/blog/contract-farming-away-
to-sustainable-agriculture
2. Ali, A. B. (2018). Malt barley commercialization through contract farming scheme: A systematic review of experiences and prospects in Ethiopia.
African Journal of Agricultural Research, 13(53), 2957–2971.
3. Amirnejad, H., Hosseini Yekani, S. A., Mojaverian, S. M., Keshiri Kalayi, F., & Taslimi, M. (2020). Determining Strategies for the Development
of the Agricultural Sector in Mazandaran Province. Agricultural Economics and Development, 34(4), 421–445. https://doi.org/10.22067/
jead.2021.17798.0 (In Persian).
4. Bahmani, M. A., & Hojjati Kermani, R. A. (2020). Legal and Jurisprudential Challenges in the Identification and Acceptance of Contractual Joint
Ventures and Oil Operational Agreements in Iran. Legal Research, 23(92), 271-302. (In Persian).
5. Cai, J., Ung, L., Setboonsarng, S., & Leung, P. (2008). Rice contract farming in Cambodia: Empowering farmers to move beyond the contract
toward independence.
6. Contracts Counsel. (n.d.). Land Use Agreement Overview. Retrieved from: https://www.contractscounsel.com/t/us/land-use-agreement
7. Darkeh, M., Zarafshani, K., & Sharafi, L. (2021). Functions and Challenges of Contract Farming in Kermanshah Province. Rural Research, 12(2),
258–273. https://doi.org/10.22059/jrur.2021.299968.1482 (In Persian).
8. Dolynska, M. (2022). Features of Concluding an Emphyteutic Land Use Agreement in Ukraine. Social Legal Studios.
9. El Houssain, B., Fadlaoui, A., Allali, K., & Arrach, R. (2019). Contract farming in the Morocco cereal sector: contract clauses, ambiguity, and
opportunism. Development, 1.
10. Federal Packers and Stockyards Act, 7 U.S.C. §181–229.
11. Food and Agriculture Organization of the United Nations (FAO). (2017). Contract farming and the law: What do regulators need to know?, 1.
Retrieved from: https://www.fao.org/common-pages/search/en/?q=contract%20farming
12. France. Code rural et de la pêche maritime, Article R326-1.
13. Golestanian, M., Nabieian, S., & Mirzaei Khalilabadi, H. R. (2020). Factors Influencing the Choice of Agricultural Contracts from the Perspective
of Farmers in Bardsir County: A Mixed Logit Approach. Iranian Agricultural Economics and Development Research, 51(2), 263–278.
https://doi.org/10.22059/ijaedr.2019.274079.668699 (In Persian).
14. Hall, C. R., & Langemeier, L. N. (1999). Contracts as a risk management tool.
15. Hasani, B., & Bayati, M. H. (2018). A Jurisprudential and Legal Review of Public-Private Partnership Contracts in Iran’s Legal System. Islamic
Jurisprudence and Legal Studies, 10(19), 89–114. https://doi.org/10.22075/feqh.2018.7747 (In Persian).
16. Hashemi Shahroudi, S. M. (1996). Mu’jam Fiqh al-Jawahir [Lexicon of Jawahir Fiqh], Vol. 1. Beirut: Al-Ghadir. (In Persian).
17. Hooshmand, M., Hashemnia, M., Abdollahi, Z., & Eskandari Pour, Z. (2014). Factors Affecting Private Investment in Iran’s Agricultural Sector.
Iranian Journal of Applied Economic Studies, 3(11), 239–255. (In Persian).
18. Hosseini Yekani, S. A., & Zibaei, M. (2010). Specification of Futures Contracts for Agricultural Products in Iran. Agricultural Economics and
Development, 18(1), 81–110. https://doi.org/10.30490/aead.2010.58814 (In Persian).
19. Karami, A., & Mohammadi Tamri, Z. (2017). Identifying and Prioritizing Supply Chain Risks in Agricultural Townships of Mazandaran Province.
Agricultural Economics, 11(3), 1–24. https://doi.org/10.22034/iaes.2017.26476 (In Persian).
20. Kazemi, M. (2019). The Civil Code or Persian Jurisprudence: A Study on the Sources and Structure of Iran’s Civil Code. Journal of Private Law
Research, 8(29), 249–276. https://doi.org/10.22054/jplr.2019.40851.2172 (In Persian).
21. Kazemnejad, M. (2014). The Inevitable Necessity of Agricultural Support in Iran and the World. Agricultural Economics, 8(Special Issue),
205–216. (In Persian).
22. Li, Q., & Wang, Z. (2024). Impact of contract farming on green technological efficiency of farmers: A comparative study of two contract
organizational models. Frontiers in Sustainable Food Systems, 8, 1368997.
23. Ling, L., Guo, X., Hu, Z., & Liang, L. (2013). Risk-sharing contracts under random yield and stochastic demand in agricultural supply chains.
Chinese Journal of Management Science, 2, 50–57.
24. MacDonald, J. M., & Korb, P. (2006). Agricultural contracting update: Contracts in 2003. Information Bulletin, (9).
25. Mahmoudi, M., & Karbasi, A. (2019). Determinants of the Formation and Implementation of Agricultural Contracts: A Switching Regression
Approach. Agricultural Economics, 13(3), 133–168. https://doi.org/10.22034/iaes.2019.86162.1583 (In Persian).
26. Martial, G. H., Cordier, J., & Janssen, J. (2003). Management of Agricultural Crop Insurance Contracts: A Theoretical Strategy.
27. Meti, M., Suresha, S. V., & Raghuprasad, K. P. (2016, March). Contract farming: An innovative approach for risk management by small farmers.
Proceedings of International Academic Conferences, No. 3305851. International Institute of Social and Economic Sciences.
28. Mohammadi, A. (1997). Sharh Tazkirat al-Muta’allimin [Commentary on Tadhkirat al-Muta’allimin], Vol. 1. Qom: Dar al-Fikr. (In Persian).
29. Nazarpoor, M. N., & Molakarimi, F. (2015). A Jurisprudential Review of the Central Bank’s Civil Partnership Contract. Islamic Economics,
15(57), 137–166. (In Persian).
30. Nazarpoor, M. N., & Salimi, F. (2015). The Impact of Using Partnership-Based Contracts in Iran’s Interest-Free Banking During Recession and
Boom. Journal of Economic Studies and Policies, 2(2), 57–84. (In Persian).
31. Nikbakht, H. R., & Adib, A. A. (2017). Reform and Mediation as Alternatives to Traditional Methods of Civil and Commercial Dispute Resolution
and Their Application in the Oil Industry. Legal Research Quarterly, 20(78), 57–81. (In Persian).
32. Pandian, S. P., Prabhu, S. V., & Jayaprakash, S. (2011). An Empirical Investigation on Contract Farming and Its Impact on Farmers in India.
International Journal of Marketing and Management Research, 2(10), 71–82.
33. Pasban, M. R., & Ghorbani Zelikhai, M. (2017). Rights, Duties, and Responsibilities of Partners in Joint Venture Contracts with Emphasis on
Economic Groups with Shared Interests. Judicature Quarterly, 17(90), 1-31. (In Persian).
34. Pultrone, C. (2012). An Overview of Contract Farming: Legal Issues and Challenges. Uniform Law Review, NS–Vol. XVII, 1/2, 282.
35. Rahimi Feyzabad, F., & Yazdanpanah, M. (2020). Factors Affecting Farmers’ Satisfaction with Educational Extension Classes in Alishtar
County. Journal of Agricultural Extension Management Research, 12(54), 120–136. https://doi.org/10.22092/jaear.2020.124308 (In Persian).
36. Ray, R. K., Kumari, M., Sinha, P., Umrao, A., & Nayak, S. (2020). Problem and Prospect of Contract Farming in India. Food and Scientific
Reports, 1(8).
37. Rezaei, A., Alimohammadi, T., & Kookhaei Zadeh, K. (2020). Legitimacy of Conditioning Civil Partnership Contracts on Gratuitous Agency.
Islamic Jurisprudence and Legal Studies, 12(23), 97–122. https://doi.org/10.22075/feqh.2020.19825.2347 (In Persian).
38. Rezaei, R., Gholifar, E., Safa, L., & Kazemi Tarabfan, M. (2011). Identifying Barriers to Corporate Entrepreneurship in Agricultural Technical
and Engineering Consulting Firms in Zanjan Province. Journal of Entrepreneurship Development, 4(4), 27–46. (In Persian).
39. Salehi Rezaabadi, F., Salarpour, M., Mardani Najafabadi, M., & Ziaei, S. (2019). Economic Assessment of the Impact of Quantity and Quality
Changes in Irrigation Water on Agriculture in Kerman Province. Agricultural Economics and Development, 33(4), 395–412. https://doi.
org/10.22067/jead2.v33i4.84119 (In Persian).
40. Seyyedi Arani, S. A. (2014). The Overlap of the Concepts of Partnership and Common Ownership in Iran’s Civil Code. Legal Research, 17(66),
255–283. (In Persian).
41. Shabani Jahromi, F., & Shabani Jahromi, F. (2019). Contractual Mechanisms for Creating Flexibility in Day-Rate Drilling Contracts. Journal of
Energy Law Studies, 5(1), 115–129. https://doi.org/10.22059/jrels.2019.258303.208 (In Persian).
42. Shamsollahi, M. (2020). The Theory of Contractual Solidarity. Private Law Journal, 17(2), 543–584. https://doi.org/10.22059/
jolt.2020.283285.1006744 (In Persian).
43. Sheikh Ansari, M. (2000). Sigh al-‘Uqud wa al-Iyqā‘āt [The Forms of Contracts and Legal Declarations]. Qom: Majmaʿ Andisheh Islami. (In
Persian).
44. Sobhani, H., & Alimardani, P. (2016). The Compatibility of Monetary Policy with Non-Usury Banking Operations in Iran (1984–2014). Majles
and Strategy, 23(86), 33–68. (In Persian).
45. Stemler, A., & Raymond, A. H. (2013). Promoting Investment in Agricultural Production: Increasing Legal Tools for Small to Medium Farmers.
Ohio State Entrepreneurship Business Law Journal, 8, 281.
46. Taheri, S., Khosravi, H., Taghizadeh, E., & Khosroshahi Motlagh, M. (2020). A Contractual Justice Approach to Contractual Balance Based on
Distributive Justice. Iranian Journal of Political Sociology, 3(2), 443–507. https://doi.org/10.30510/psi.2021.299470.2123 (In Persian).
47. Taskhiri, M. A. (2013). The Reason for the Prohibition of Gharar and Its Impact on Transactions. Comparative Jurisprudence Biannual, 1(1),
33–54. (In Persian).
48. UNIDROIT / FAO / IFAD. (2015). Legal Guide on Contract Farming. p. 2.
49. Viinikainen, T., & Bullón Caro, C. (2012). Enabling Regulatory Frameworks for Contract Farming. FAO.
50. Yavari, G., & Azizi, V. (2020). Prioritizing Barriers and Challenges in Achieving the Goals of Iran’s Economic, Social, and Cultural Development
Plans in Agriculture and Natural Resources. Economic Policy, 12(24), 207–235. https://doi.org/10.22034/epj.2021.12372.1992 (In Persian).
Send comment about this article
Enter Name.
Enter a valid email address.
Enter a vaid affiliation.
Enter comments (At leaset 10 words)
CAPTCHA Image
Enter Security Code Correctly.

  • Receive Date 08 June 2025
  • Accept Date 28 October 2025