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Will India's Contract Farming Ordinance Be a Corporate Lifeline for Agriculture? -Siraj Hussain

-TheWire.in

Even though India has had a few relatively successful models, contract farming has failed to take off in a meaningful manner.

Of the three agriculture-related ordinances promulgated on June 5, 2020, the most predictable was ‘The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020’.

Put simply, it provides a legal basis to the existing practice of contract farming in India’s agriculture and allied sectors.

In 2018, the Union Ministry of Agriculture circulated a model law on contract farming. It was called ‘The State /UT Agricultural Produce Contract Farming (Promotion and Facilitation) Act, 2018’. The Ordinance draws from this model Act.

It is not that contract farming is new to India or it did not have any legal backing. Under the Model APMC Act, 2003 also, contract farming was permitted and the Agricultural Produce Marketing Committees (APMCs) were given the responsibility to record the contracts. They were also mandated to resolve the disputes in such contracts. However, market fee and other levies/charges were payable to APMCs.

Currently, contract farming requires registration with the APMC in a few states. This means that contractual agreements are recorded with the APMCs, which can also resolve disputes arising out of these contracts. Furthermore, market fees and levies are paid to the APMC to undertake contract farming.

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