A contract farming arrangement between a firm and a farmer is an important mechanism for development in the agribusiness sector. Among the major challenges of these arrangements are the violations of the contract by the parties under conditions of extreme market price fluctuations. To address this issue, we propose a violent market price (VMP) contract, which incentivises the firm and the farmer to remain in the contract even under extreme price fluctuation. In the VMP contract, we propose a pricing mechanism which adjusts the price based on adverse market conditions. We model the firm-farmer interaction as a Stackelberg game and derive the optimal contract parameters using backward induction. We establish that there is no incentive to deviate from the VMP contract. The sum of the expected profits of the firm and the farmer is found to be higher when both honour the VMP contract than when they violate. The individual rationality conditions for the firm and the farmer to enter into the contract are derived. The model is demonstrated through numerical illustrations based on case-study, and sensitivity analysis is performed to provide further insights.

企业与农民之间的合同农业安排是农业综合企业发展的重要机制。这些安排的主要挑战之一是当事方在市场价格剧烈波动的情况下违反合同。为了解决此问题，我们提出了一个暴力市场价格（VMP）合同，该合同使公司和农民即使在价格剧烈波动的情况下也仍然可以保留在合同中。在VMP合同中，我们提出了一种定价机制，可以根据不利的市场条件调整价格。我们将公司与农民之间的互动作为Stackelberg博弈模型进行建模，并使用后向归纳法推导最佳合同参数。我们确定没有动机偏离VMP合同。发现当双方都履行VMP合同时，公司和农民的预期利润之和要比违反合同时要高。得出了企业和农民签订合同的个人合理性条件。该模型通过基于案例研究的数字插图进行了演示，并进行了敏感性分析以提供进一步的见解。