Authors: Nikolaos Avramidis, Evangelos Manouvelos

Title: The changing role of Banks in Contract Farming and Livestock Farming: Comparative assessment of Greek and international practice.

Abstract

The role of agriculture in the economy is under great criticism by a large number of economists in developed countries. Agriculture has undergone a severe underestimation in respect to its GDP contribution, despite its crucial multi – level contribution from ancient times to the extinction of hunger and poverty, to environmental protection and to economic growth.

Despite the economic crisis of the last decade in Greece, the agricultural sector remains one of the main pillars of the Greek economy along with tourism. One of the key reasons of the sector’s economic growth in recent years is Contractual Agriculture and Livestock Farming Programs.

Contractual Agriculture and Livestock Farming Programs are based on the beneficial cooperation between producers and companies of agricultural products, covering both product processing and exporting, and contributing to the enhancement of the liquidity and rationalization of the production process through corresponding financial programs.

This paper attempts to study Greek Contractual Agriculture & Livestock Farming Programs in comparison to the international practice and further explore the opportunities to the economy worldwide. Even though Contract farming has been used for agricultural production for decades, its popularity appears to have been increasing in recent years.

The use of contracts has become attractive to many farmers because the arrangements can offer both an assured market and access to production support. What are the limits to these arrangements and up to what level can Banks intermediate between producers and buyers?