Govt unveils model Act on contract farming
To protect farmers from price risks, price volatility and distress sales and to ensure remunerative price of farm produce to farmers, the Ministry of Agriculture has adopted the Model “State/UT Agricultural Produce and Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018” on Tuesday. The Ministry has urged the States to enact their respective legislations, taking the Model Act as their guide. The Model Act also curtails the role of States.
As per the Model Act, the State’s role will be limited to protecting the interests of farmers and others who enter into contract with sponsors. Contracted produce is to be covered under crop/livestock insurance in operation and the contract farming is to remain outside the ambit of respective Agricultural Produce Marketing Act (APMC) of the states.
Union Agriculture Minister Radha Mohan Singh on Tuesday adopted the model act on contract farming – an improved version of its earlier draft – which provides for sponsors to get into a contract with an individual or group of farmers not just for production but also for marketing of produce and farm services. “This will also help farmers to increase their income,” he said.
According to officials, the contract farming is a pre-production season agreement between farmers (either individually or collectively) and sponsors. It transfers risk of post-harvest market unpredictability to sponsors (individual or company) who have to pay agreed prices to farmers under an advance agreement.
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