Agencies

NEW DELHI, May 23: Amid estimates of record production of agricultural and horticultural produce this year, the Centre on Tuesdayreleased a model act on contract farming and asked states to adopt it to save farmers from price volatility.

The proposed model law - State/UT Agricultural Produce and Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018 - intends to integrate farmers with agro-industries and exporters for better price realisation through mitigating market and price risks.

Once adopted by states, it’ll formally facilitate entry of private players into the farm sector as it would induce competition and ensure assured and better price of farm produce to farmers through advance agreements. It can offer assured price to farmers and save them from problem of plenty - a situation where farmers have to go for distress sale when bumper crops cause glut in the market.

“There is unanimity among the states to adopt the ‘model contract farming and services’ Act in its true spirit so as to ensure assured market at pre-agreed prices,” said Union agriculture minister Radha Mohan Singh.

The proposed law was unveiled here in presence of agriculture marketing ministers from many states including Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Haryana, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh.

At present, some states like Maharashtra, Haryana, Karnataka and Madhya Pradesh have limited formal contract farming while some others have such informal practice in case of commercial crops like cotton, coffee, tobacco, mango, litchi, sugarcane and rubber. An absence of any exclusive law on contract farming, has, however, prevented it to pick up at the ground across the country.

It’s currently being implemented in a limited manner under provisions of the Agricultural Produce Market Committee (APMC) Act in certain states. It, however, does not provide adequate confidence to farmers and incentives to the sponsors to enter into a contract.

“Since the APMCs are designated registering and dispute settlement authority, it invariably leads to a conflict of interest situation due to the presence of sponsors in the committees. Though there exists Indian Contract Act, 1872, it is felt that the law is not very conducive for farm sector,” said an official.

He said the model act, if adopted by the states, would protect the interests of both farmers and the contract farming sponsors.

The model act, therefore, keeps the contract farming outside the ambit of the APMC Act. It also provides for a major role for Farmer Producer Organisation (FPO) or Farmer Producer Company (FPC) in promoting contract farming. Under the proposed law, the FPOs or FPCs can enter into contract with sponsor on behalf of farmers - a move which may help small and marginal farmers who account for nearly 85% of the total farmers in the country.

“The Act lays special emphasis on protecting the interests of the farmers, considering them as weaker of the two parties entering into a contract. In addition to contract farming, service contracts all along the value chain including pre-production, production and post-production activities have also been included in the Act”, said the ministry.

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Kenter Joya Riba

(Managing Editor)
      She is a graduate in Science with post graduation in Sociology from University of Pune. She has been in the media industry for nearly a decade. Before turning to print business, she has been associated with radio and television.
Email: kenterjoyaz@easternsentinel.in / editoreasternsentinel@gmail.com
Phone: 0360-2212313

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