The panel appointed by the Union agriculture ministry to suggest reforms in marketing of farm produce will suggest that states governments reduce the security deposit for the contract farming.
It will also ask for changes in the Agricultural Produce Marketing Committee (APMC) law to incorporate private players in providing infrastructure in this regard.
The committee, chaired by Maharashtra’s minister for marketing and cooperation, Harshvardhan Patil, would be soon presenting its first set of recommendations.
It is learnt the committee has suggested all states slash the ‘default security’, an amount equivalent to a certain percentage of the purchase value that is distributed among farmers in case the buyer refuses to purchase the produce as contracted.
According to sources, Haryana is likely to do this, by reducing the requisite security from 15 per cent of the estimated purchase value to five per cent.
The state allowed contract farming in 2008. Since then, only United Breweries has ventured, engaging about 5,500 acres for barley cultivation.”
The corporates refrained due to unsuitable tax structure and high default fee,” said an official in the Haryana Mandi Board.
Uttarakhand, Gujarat and Punjab also allow contract farming.
Sources told Business Standard 18 amendments have been suggested in the APMC Act. So far, 16 states have accepted the Model APMC Act framed by the central government and it was under consideration in seven states.
The committee is also exploring the feasibility of involving private companies for post-harvest infrastructure for perishables, specially cold chains and logistics, on a public-private-partnership model.
The committee wishes farmers to have a choice on where to sell their produce, instead of being forced to do so at a single place.
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