Farm Peace’s 100% buy-back uses no formal farmer contracts

Farm Peace Limited operates its stated 100% buy-back potato model without formal written contracts with farmers. As of March 31, 2026, Farm Peace engaged 853 farmers across 5,660 acres, while seasonal arrangements relied on a one-page Gujarati note, verbal acknowledgement, seed distribution and harvest collection processes.

How does Farm Peace’s 100% buy-back work without formal farmer contracts?

Farm Peace uses seasonal arrangements rather than signed farmer agreements. Before each cultivation season, Farm Peace distributes a standard one-page circular or note in Gujarati that sets out seed varieties, indicative price and delivery timelines; a separate disclosure says the note includes purchase price, quality parameters and general procurement conditions. Farmers acknowledge the communication verbally, with participation in seed distribution and harvest collection serving as evidence of the arrangement.

Farm Peace says the arrangement assures procurement of farmers’ entire produce at pre-agreed prices and pre-defined quality parameters. Contract farming is defined in the company’s disclosure as an agreement between farmers and processing or marketing firms for production and supply, frequently at predetermined prices. Farm Peace therefore sets the principal commercial terms before cultivation, but does not currently use formal written farmer contracts.

The stated 100% buy-back is subject to processing specifications. After harvest, Farm Peace says potatoes are sorted and graded for size, shape, physical defects and dry matter content, and only produce meeting processing requirements is collected under the buy-back arrangement. The assurance is consequently framed around pre-agreed prices and quality standards, rather than an unconditional purchase of all harvested potatoes.

Farm Peace has proposed implementing formal written agreements with farmers from the current financial year onward. The proposed agreements are to define pricing terms, quality specifications, delivery timelines and dispute-resolution procedures. Until implementation, the Gujarati seasonal note and records of seed distribution and harvest collection remain the disclosed basis of the farmer relationship.

What support sits behind Farm Peace’s buy-back model?

Farm Peace supports its seasonal arrangement through seed supply, agronomic advice and cultivation monitoring. The company sources certified G-3 and G-4 generation seed potatoes from Uttar Pradesh, Punjab and Haryana, while participating farmers cultivate processing varieties including Santana, Frysona, Innovator, Lady Rosetta and Chipsona in Gujarat. G-3 and G-4 refer to generations of seed potatoes stated in Farm Peace’s supplier disclosure.

The cultivation calendar gives the arrangement a defined operating cycle. Farm Peace distributes seed potatoes between October and early November, planting begins in early November, and harvesting runs from late January to March. For the period ended March 31, 2026, Farm Peace reported an approximate five-month seed-to-harvest cycle and an approximate six-month period from harvest to final delivery.

Farm Peace reported five average field-officer visits per farmer per season in each of the years ended March 31, 2024, 2025 and 2026. Its process description says field officers visit farms every 10 to 15 days, record farm conditions through the Farm Peace mobile application and provide advice on irrigation, nutrient management, pests and disease. The application is also used to record farmer KYC, seed distribution and field observations.

Drip irrigation is mandatory for participating farmers, while land size and agricultural inputs vary according to individual capacity and field conditions. Farm Peace says drip irrigation can reduce water usage by up to 50% while improving potato productivity. Procurement prices are fixed in advance for each potato variety and are uniform for farmers cultivating the same variety, making input supply, field supervision and compliance with quality conditions central to the model.

How large is the farmer network using Farm Peace’s seasonal notes?

Farm Peace expanded its farmer network to 853 farmers in FY 2025-26, from 763 in FY 2024-25 and 498 in FY 2023-24. The latest increase was led by continued participation: 763 farmers were existing farmers and 90 were newly onboarded in FY 2025-26, compared with 422 existing and 341 newly onboarded in FY 2024-25.

The cultivated area reached 5,660 acres at March 31, 2026, compared with 5,100 acres at March 31, 2025 and 3,200 acres at March 31, 2024. Sales volume rose to 61,680 metric tonnes in FY 2025-26 from 55,000 metric tonnes in FY 2024-25 and 32,500 metric tonnes in FY 2023-24. The seasonal-note system has therefore expanded alongside acreage, production and recurring farmer participation.

Production per acre increased to 10.90 metric tonnes in FY 2025-26 from 10.78 metric tonnes in FY 2024-25 and 10.16 metric tonnes in FY 2023-24. Production per farmer rose to 72.31 metric tonnes in FY 2025-26 from 72.08 metric tonnes in FY 2024-25 and 65.26 metric tonnes in FY 2023-24. Farm Peace cultivates primarily in four Gujarat districts, Sabarkantha, Aravalli, Mehsana and Banaskantha, making the model dependent on participation and farming conditions in those areas.

Farm Peace’s cold-storage capacity was 13,000 metric tonnes at March 31, 2026, unchanged from March 31, 2025 but above 5,600 metric tonnes at March 31, 2024. The company says harvested produce is moved either directly to processors or into leased cold-storage facilities after grading. This post-harvest process links farmer collection to processor demand and the quality conditions in the seasonal arrangement.

What does the model mean for Farm Peace’s revenue and supply chain?

Farm Peace’s seasonal farmer arrangements support sales of processing-grade potatoes to food processors. Revenue from operations rose to Rs 90.83 crore in FY 2025-26 from Rs 79.24 crore in FY 2024-25 and Rs 62.55 crore in FY 2023-24. Profit after tax was Rs 7.53 crore in FY 2025-26, compared with Rs 6.66 crore and Rs 6.16 crore, respectively.

The revenue mix shifted materially toward Santana potatoes. Santana accounted for Rs 49.61 crore, or 54.62% of FY 2025-26 revenue from operations, compared with Rs 20.23 crore, or 25.53%, in FY 2024-25. Seed sales were Rs 18.08 crore, or 19.91% of FY 2025-26 revenue, showing that Farm Peace both buys produce under its buy-back model and sells seed potatoes to farmers and other customers.

Farm Peace’s top 10 potato customers represented 80.68% of total potato sales in FY 2025-26, compared with 82.04% in FY 2024-25 and 92.70% in FY 2023-24. Its top 10 potato suppliers represented 63.72% of total potato purchases in FY 2025-26, up from 35.96% in FY 2024-25. As farmers are treated as suppliers of produce under the buy-back model, Farm Peace depends on farmer delivery as well as processor demand.

Working-capital timing lengthened as Farm Peace expanded. The company reported a 139-day working-capital cycle in FY 2025-26, compared with 85 days in FY 2024-25 and 41 days in FY 2023-24. In FY 2025-26, trade receivables were 172 days, inventory was 101 days and trade payables were 134 days, making customer collections, storage and supplier payments relevant to the cash requirements of pre-agreed procurement.

Conclusion

Farm Peace’s 100% buy-back model is an operating framework based on pre-agreed pricing, seed supply, field support, quality checks and collection rather than formal written farmer contracts. The framework covered 853 farmers and 61,680 metric tonnes of sales in FY 2025-26, but its disclosed documentation consists of Gujarati seasonal notes and verbal acknowledgement.

The next development to watch is Farm Peace’s proposed introduction of formal written agreements from the current financial year. Farm Peace says those agreements will specify pricing, quality, delivery and dispute-resolution terms; their adoption across the farmer network would determine whether the seasonal arrangement becomes a documented contractual structure.