Description

Under this scheme farmers receive a grant if they undertake to grow a particular crop (e.g. rice) on a particular acreage within a particular period of time. The product may be of strategic importance to the national food or energy supply (e.g. rice, maize), but it may also be an export commodity (e.g. tea). It is usually up to the farmer to decide how much land to earmark for meeting this obligation.

Industrialised countries often use this obligation as a measure for dealing with environmental, resource or climate issues. For example, an obligation to grow catch crops (e.g. legumes) can help prevent soil erosion, reduce nutrient run-off and protect groundwater. The obligation to grow cash crops for energy use can reduce the demand for fossil fuels. Developing countries and emerging economies, on the other hand, often use this obligation as a market control instrument for fulfilling export contracts or securing supplies of staple foods at home.

Requirements

• A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
• Constant market surveying and forecasting
• Monitoring and control system for the agricultural production processes supported
• Sanction mechanisms
• Country-wide monitoring of natural resources and their quality (e. g. water, soil, forests, air, grassland)
• Clear and coherent political strategy and targets for policy-makers and public authorities
• Close cooperation and knowledge sharing with local advisory services
• Close cooperation and knowledge sharing with research institutions
• Close cooperation and knowledge sharing with farmers' organisations
• Respect for cultural landscape and traditions
• Clear responsibilities in public authorities

Possible Negative Effects

Where specialised cultivation systems have been set up, the sudden discontinuation of the obligation to grow a specific crop can lead to economic losses.