Since the early 1990s, contract farming as a market institution in the poultry industry in Bangladesh has evolved along with the expansion of commercial poultry farming. Apart from classical contract farming within vertically integrated enterprises, there are also formal and informal contract arrangements in input marketing and output marketing. In this paper, characteristics of these forms of contract arrangements and their implications for the poultry industry in Bangladesh are discussed. A high drop-out rate among commercial poultry producers is observed. Results of a survey conducted among farmers who dropped out of the poultry business in recent years are presented, highlighting the causes of dropping out and the possible role of contract farming in addressing them.