The Centre launches model contract farming law, kicking the ball into the courts of the states

The Centre launches model contract farming law, kicking the ball into the courts of the states. Emphasising on the government’s aim is to double farmers’ income by 2022, Agriculture Minister Radha Mohan Sharma released the model contract farming law. The law targets to shield farmers’ risks by creating an assured market for their produce at a pre-agreed price, while encouraging investment from agribusiness and food processing industries by enhancing productivity and cost efficiency.

It provides for State-level boards to be set-up to promote and facilitate — rather than regulate — contract farming, and sets out a framework for registering and recording agreements. It also provides for a dispute settlement authority. The model law stipulates that the sponsor will not be allowed to build any permanent structure on the farmers’ land. “Now, the ball is in the court of states, who have to adopt the model law and implement it at the earliest for the benefit of farmers,” Agriculture Minister Radha Mohan Singh said after releasing the model law.

"Apart from providing for contract relating to marketing, the Model Act also enables entering into service contracts all along the value chain, including pre-production, production and post-production," Chairman of the Committee on Doubling Farmers' Income and CEO of National Rainfed Area Authority (NRAA) Ashok Dalwai said. Contract farming is a pre-production season pact between farmers (either individually or collectively) and sponsors.

due to conflict of interest of contract farming sponsors and the APMCs, contract farming has been in practice in small scale only in states like Maharashtra, Haryana, Karnataka, and Madhya Pradesh. In states like Kerala, an effective contract farming act has been recommended by experts to tackle the growing agrarian crisis of disinterested sponsors leaving their land uncultivated while deserving farmers are left without any farmland.

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