An Agricultural Products Marketing Agreement is an agreement made between the producer (farmer) and the purchaser of the agricultural products being a person undertaking agri-business. This Agreement sets out the products to be produced, the quality, quantity and the price. It also sets out the terms under which the purchaser engages the producer for production.
The Marketer is not required to supply the farmer with planting materials and offer technical support where necessary. Farmers and ranchers utilize production contracts as a tool to manage the risks inherent in agricultural production. Agri-businesses employ production contracts to manage risk and to control expenditures.