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LATEST NEWS UPDATES | Contract farming Act an inadequate model -Sukhpal Singh </title>
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-The Tribune
Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.
The first attempt at reforms in agricultural..."/>
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-The Tribune
Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.
The first attempt at reforms in agricultural..." />
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<h1 class="cat-box-title">Contract farming Act an inadequate model -Sukhpal Singh</h1>
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Published on</span><span class="text-date"> May 24, 2018</span>
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<div align="justify">-The Tribune<br /><em><br />Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.<br /></em><br />The first attempt at reforms in agricultural markets was made by the union government with the design of a model Agricultural Produce Market Committee (APMC) Act in 2003 which provided for new market channels for farmers and buyers, ie direct purchase, private wholesale markets, and contract farming (CF) were made legal. In the 15 years since, the union Ministry of Agriculture and Farmer Welfare (MoAFW) has been struggling to get the Act accepted at the state level, but only some states have adopted it fully, some only partially and a few are not even looking at it (eg UP). Now, the MoAFW has come up with another model Act — the Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act 2017. It has also decided to separate CF from the APMC domain, citing conflict of interest which is not letting the CF practice to spread as traders and commission agents in APMC markets oppose it due to their business getting adversely affected as the contracted produce does not have to come to the APMC mandi and does not need to pass through the mandi agents. <br /><br />Therefore, taking a cue from Punjab which had in 2013 instead of amending the APMC Act, enacted a separate Act on CF (unnecessary and not operationalised even today), the MoAFW has floated a model Contract Farming and Services (Promotion and Facilitation) Act, 2018 (APLCFSA, 2018). This model also mentions that one of the benefits of keeping CF and services out of the purview of the APMC would be that the buyers would not need to pay the market fee and commission charges, resulting in a saving of 5-10 per cent of their transaction costs. It remains to be seen how many states would adhere to the new Act. Punjab would have to amend its 2013 Act.<br /><br />The 2018 model Act retains the 2003 model Act provision which protects the ownership right of the farmer on land as the sponsor is not allowed to construct any structures on it. It also makes crop insurance a part of the CF arrangement which was much needed to reduce farmer's production risk in the absence of any other mechanism, especially when high-value crops are more prone to risk. But, its goodness ends there.<br /><br /><em>Regulation versus facilitation<br /></em><br />The APLCFSA, 2018 bids goodbye to regulation as an objective. The 2003 model Act had mandatory and optional provisions of CF (contract farming). This suggests that it is left to the parties to the contract to decide on all aspects of the agreement. On the other hand, the Act states that the sponsor shall have to make arrangements for purchase and provide materials for filling and weighing/measuring of the produce, in advance when the produce is to be taken by the producer for delivery to the sponsor at the agreed place. When other terms have been left for the two parties to agree on, why these are mandated, it is not clear. Similarly, the Act specifies terms of payment through electronic clearance: two-third of the value of bought produce to be paid at the time of delivery and the rest after quality assessment (QA). If QA is pending, how can the buyer pay for the produce? <br /><br />Please <a href="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html" title="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html">click here</a> to read more. <br /></div>
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<br><a href="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html" class="re" target="_blank">The Tribune, 24 May, 2018, http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html</a><div class="clear"></div>
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LATEST NEWS UPDATES | Contract farming Act an inadequate model -Sukhpal Singh </title>
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Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.
The first attempt at reforms in agricultural..."/>
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<h1 class="cat-box-title">Contract farming Act an inadequate model -Sukhpal Singh</h1>
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Published on</span><span class="text-date"> May 24, 2018</span>
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<div align="justify">-The Tribune<br /><em><br />Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.<br /></em><br />The first attempt at reforms in agricultural markets was made by the union government with the design of a model Agricultural Produce Market Committee (APMC) Act in 2003 which provided for new market channels for farmers and buyers, ie direct purchase, private wholesale markets, and contract farming (CF) were made legal. In the 15 years since, the union Ministry of Agriculture and Farmer Welfare (MoAFW) has been struggling to get the Act accepted at the state level, but only some states have adopted it fully, some only partially and a few are not even looking at it (eg UP). Now, the MoAFW has come up with another model Act — the Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act 2017. It has also decided to separate CF from the APMC domain, citing conflict of interest which is not letting the CF practice to spread as traders and commission agents in APMC markets oppose it due to their business getting adversely affected as the contracted produce does not have to come to the APMC mandi and does not need to pass through the mandi agents. <br /><br />Therefore, taking a cue from Punjab which had in 2013 instead of amending the APMC Act, enacted a separate Act on CF (unnecessary and not operationalised even today), the MoAFW has floated a model Contract Farming and Services (Promotion and Facilitation) Act, 2018 (APLCFSA, 2018). This model also mentions that one of the benefits of keeping CF and services out of the purview of the APMC would be that the buyers would not need to pay the market fee and commission charges, resulting in a saving of 5-10 per cent of their transaction costs. It remains to be seen how many states would adhere to the new Act. Punjab would have to amend its 2013 Act.<br /><br />The 2018 model Act retains the 2003 model Act provision which protects the ownership right of the farmer on land as the sponsor is not allowed to construct any structures on it. It also makes crop insurance a part of the CF arrangement which was much needed to reduce farmer's production risk in the absence of any other mechanism, especially when high-value crops are more prone to risk. But, its goodness ends there.<br /><br /><em>Regulation versus facilitation<br /></em><br />The APLCFSA, 2018 bids goodbye to regulation as an objective. The 2003 model Act had mandatory and optional provisions of CF (contract farming). This suggests that it is left to the parties to the contract to decide on all aspects of the agreement. On the other hand, the Act states that the sponsor shall have to make arrangements for purchase and provide materials for filling and weighing/measuring of the produce, in advance when the produce is to be taken by the producer for delivery to the sponsor at the agreed place. When other terms have been left for the two parties to agree on, why these are mandated, it is not clear. Similarly, the Act specifies terms of payment through electronic clearance: two-third of the value of bought produce to be paid at the time of delivery and the rest after quality assessment (QA). If QA is pending, how can the buyer pay for the produce? <br /><br />Please <a href="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html" title="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html">click here</a> to read more. <br /></div>
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<br><a href="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html" class="re" target="_blank">The Tribune, 24 May, 2018, http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html</a><div class="clear"></div>
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LATEST NEWS UPDATES | Contract farming Act an inadequate model -Sukhpal Singh </title>
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Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.
The first attempt at reforms in agricultural..."/>
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Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.
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<h1 class="cat-box-title">Contract farming Act an inadequate model -Sukhpal Singh</h1>
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Published on</span><span class="text-date"> May 24, 2018</span>
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<div align="justify">-The Tribune<br /><em><br />Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.<br /></em><br />The first attempt at reforms in agricultural markets was made by the union government with the design of a model Agricultural Produce Market Committee (APMC) Act in 2003 which provided for new market channels for farmers and buyers, ie direct purchase, private wholesale markets, and contract farming (CF) were made legal. In the 15 years since, the union Ministry of Agriculture and Farmer Welfare (MoAFW) has been struggling to get the Act accepted at the state level, but only some states have adopted it fully, some only partially and a few are not even looking at it (eg UP). Now, the MoAFW has come up with another model Act — the Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act 2017. It has also decided to separate CF from the APMC domain, citing conflict of interest which is not letting the CF practice to spread as traders and commission agents in APMC markets oppose it due to their business getting adversely affected as the contracted produce does not have to come to the APMC mandi and does not need to pass through the mandi agents. <br /><br />Therefore, taking a cue from Punjab which had in 2013 instead of amending the APMC Act, enacted a separate Act on CF (unnecessary and not operationalised even today), the MoAFW has floated a model Contract Farming and Services (Promotion and Facilitation) Act, 2018 (APLCFSA, 2018). This model also mentions that one of the benefits of keeping CF and services out of the purview of the APMC would be that the buyers would not need to pay the market fee and commission charges, resulting in a saving of 5-10 per cent of their transaction costs. It remains to be seen how many states would adhere to the new Act. Punjab would have to amend its 2013 Act.<br /><br />The 2018 model Act retains the 2003 model Act provision which protects the ownership right of the farmer on land as the sponsor is not allowed to construct any structures on it. It also makes crop insurance a part of the CF arrangement which was much needed to reduce farmer's production risk in the absence of any other mechanism, especially when high-value crops are more prone to risk. But, its goodness ends there.<br /><br /><em>Regulation versus facilitation<br /></em><br />The APLCFSA, 2018 bids goodbye to regulation as an objective. The 2003 model Act had mandatory and optional provisions of CF (contract farming). This suggests that it is left to the parties to the contract to decide on all aspects of the agreement. On the other hand, the Act states that the sponsor shall have to make arrangements for purchase and provide materials for filling and weighing/measuring of the produce, in advance when the produce is to be taken by the producer for delivery to the sponsor at the agreed place. When other terms have been left for the two parties to agree on, why these are mandated, it is not clear. Similarly, the Act specifies terms of payment through electronic clearance: two-third of the value of bought produce to be paid at the time of delivery and the rest after quality assessment (QA). If QA is pending, how can the buyer pay for the produce? <br /><br />Please <a href="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html" title="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html">click here</a> to read more. <br /></div>
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<br><a href="http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html" class="re" target="_blank">The Tribune, 24 May, 2018, http://www.tribuneindia.com/news/comment/contract-farming-act-an-inadequate-model/593742.html</a><div class="clear"></div>
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LATEST NEWS UPDATES | Contract farming Act an inadequate model -Sukhpal Singh
Contract farming Act an inadequate model -Sukhpal Singh
Published on May 24, 2018
Modified on May 24, 2018
-The Tribune Contract farming is a much-needed vehicle to bring new crops, technologies, and markets to farmers. However, the new model Act 2018 opens up agricultural markets to contracting agencies without adequate safeguards for farmers.
The first attempt at reforms in agricultural markets was made by the union government with the design of a model Agricultural Produce Market Committee (APMC) Act in 2003 which provided for new market channels for farmers and buyers, ie direct purchase, private wholesale markets, and contract farming (CF) were made legal. In the 15 years since, the union Ministry of Agriculture and Farmer Welfare (MoAFW) has been struggling to get the Act accepted at the state level, but only some states have adopted it fully, some only partially and a few are not even looking at it (eg UP). Now, the MoAFW has come up with another model Act — the Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act 2017. It has also decided to separate CF from the APMC domain, citing conflict of interest which is not letting the CF practice to spread as traders and commission agents in APMC markets oppose it due to their business getting adversely affected as the contracted produce does not have to come to the APMC mandi and does not need to pass through the mandi agents.
Therefore, taking a cue from Punjab which had in 2013 instead of amending the APMC Act, enacted a separate Act on CF (unnecessary and not operationalised even today), the MoAFW has floated a model Contract Farming and Services (Promotion and Facilitation) Act, 2018 (APLCFSA, 2018). This model also mentions that one of the benefits of keeping CF and services out of the purview of the APMC would be that the buyers would not need to pay the market fee and commission charges, resulting in a saving of 5-10 per cent of their transaction costs. It remains to be seen how many states would adhere to the new Act. Punjab would have to amend its 2013 Act.
The 2018 model Act retains the 2003 model Act provision which protects the ownership right of the farmer on land as the sponsor is not allowed to construct any structures on it. It also makes crop insurance a part of the CF arrangement which was much needed to reduce farmer's production risk in the absence of any other mechanism, especially when high-value crops are more prone to risk. But, its goodness ends there.
Regulation versus facilitation
The APLCFSA, 2018 bids goodbye to regulation as an objective. The 2003 model Act had mandatory and optional provisions of CF (contract farming). This suggests that it is left to the parties to the contract to decide on all aspects of the agreement. On the other hand, the Act states that the sponsor shall have to make arrangements for purchase and provide materials for filling and weighing/measuring of the produce, in advance when the produce is to be taken by the producer for delivery to the sponsor at the agreed place. When other terms have been left for the two parties to agree on, why these are mandated, it is not clear. Similarly, the Act specifies terms of payment through electronic clearance: two-third of the value of bought produce to be paid at the time of delivery and the rest after quality assessment (QA). If QA is pending, how can the buyer pay for the produce?
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