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LATEST NEWS UPDATES | Centre to come out with draft model law on contract farming -Vishwa Mohan

Centre to come out with draft model law on contract farming -Vishwa Mohan

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published Published on Sep 11, 2017   modified Modified on Sep 11, 2017
-The Times of India

NEW DELHI: Seeking to protect farmers from price volatility by ensuring guaranteed price for their produce, the Centre will come out with a draft model law on contract farming this month.

Once it is made public, stakeholders including farmers will be given 30 days to comment and give suggestions. A final 'model' contract farming Act is expected to be released in November after incorporating the suggestions.

"The final model Act will serve as a guide for states to bring required legislation on contract farming. In fact, many states including Uttar Pradesh have shown eagerness in adopting it as early as possible," said a member of the committee, headed by senior IAS officer Ashok Dalwai, which has been working on the draft.

Contract farming is a system in which agro-processing/exporting or trading units enter into a contract with farmers to purchase a specified quantity of any agricultural commodity at a pre-agreed price. Integration of fruits and vegetable growers with agro-processing units will help farmers not only in getting better price for their produce but also in reducing post-harvest losses.

"Idea of the contract farming law is to protect farmers from price volatility, particularly in perishable items. Such a law will protect farmers from market fluctuations as it will ensure assured and better price of agricultural and horticultural produce to them through advance agreements," the official said.

The move to bring a model contract farming Act was announced by finance minister Arun Jaitley in his budget speech.

Once states adopt the model law, farmers can enter into contracts with private entities/buyers who may, in turn, invest in technology and quality inputs and even provide management skills to increase productivity and reduce transaction costs.

At present, farmers can suffer losses when a bumper crop causes a glut in the market or in a situation where their produce is unable to reach the 'mandis' in time for a variety of reasons.

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The Times of India, 11 September, 2017, http://timesofindia.indiatimes.com/india/centre-to-come-out-with-draft-model-law-on-contract-farming/articleshow/60455065.cms


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