Contract Farming Expands Win-Win Cooperation Between Farmers and Companies
홍보담당관
2024.02.15
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Contract Farming Expands Win-Win Cooperation 

Between Farmers and Companies 


Contract farming allows companies to secure a stable supply of agricultural raw materials 

and matches farmers with an assured buyer to purchase their produce with little volatility 

and uncertainty for a longer term. Smart farming will be more widely used for contract farming. 


Sejong, 15 February 2024 — On 6 February, KWON Jaehan, Deputy Minister of the Agricultural 

Innovation Policy Office, the Ministry of Agriculture, Food and Rural Affairs, on his visit to 

Keundolchan Co., Ltd., a farming corporation and a partner of CJ Freshway Corp., discussed the ways 

to strengthen farmer-company cooperation for wider adoption of contract farming practices 

and listened to voices in the industry. 


In June 2023, Keundolchan received investment from CJ Freshway and adopted smart farming. 

The farming corporation has since been delivering all of its produce grown through smart farming 

(worth KRW 840 million in 2023) to the food catering company.  


Deputy Minister Kwon said: “Contract farming is a form of transaction with many advantages, 

because it allows companies to secure a system for a stable supply of agricultural raw materials 

and provides farmers with an assured buyer to purchase their produce with little volatility 

and uncertainty for a longer term. Importantly, given that smart farming makes it possible 

to secure stable supply and quality assurance, smart farming will be more widely 

used for contract farming.” 


The ministry will set up a platform for contract farming information sharing this year to help 

companies and farmers find out their business partners more easily. The ministry will also provide 

support for various activities to expand farmer-company cooperation such as pilot-scale cultivation 

being carried out prior to contract farming, as well as develop and distribute a standard contract 

form for contract farming.


In addition, the ministry will amend its contract farming support programme1). Under the amended 

progamme, the existing 3-year support period will be extended for another three years in the case 

that a type of farming is replaced by smart farming during the period of contract farming. 

The ministry will also improve the operation of the progamme. For instance, loans will be provided 

to farmers through the “Comprehensive Smart Farm Fund” (worth KRW 100 billion in 2024) 

on the condition of building smart farming facilities, and the loan approval period will be 

shortened as well. 


1) Contract farming support programme (worth KRW 4.2 billion won in 2024): 

(1) Support for farmers (worth a maximum of KRW 40 million per farm): training, consulting, crop quality control, and rents for facilities, equipment, etc.

(2) Support for companies (worth a maximum of KRW 40 million per company): R&D for new products, promotion expenses, etc.