Contract farming law may cover all agriculture commodities

The proposed model law on contract farming, which Finance Minister Arun Jaitley announced in his Budget speech on Wednesday, could encompass all the agricultural commodities and not restrict itself to only one or two commodities.
 
According to a senior official, the proposed legislation, which along with the improved model Agricultural Produce Market Committees (APMC) Act and the model land leasing Act, will form part of the Centre’s integrated approach to re-energise farming activity in rural areas and also double farmers income.
 
“A model law on contract farming would, therefore, be prepared and circulated among the states for adoption,” Jaitley said.

 

The legislation comes close on the heels of Centre’s attempt to amend the Land Acquisition Act, which had to abandon due to strong protest from Opposition parties. All the three pieces of legislation are model laws as land and agriculture are state subjects and the Centre has very little role to play on that.
 
“We will soon constitute a high-powered committee of experts to frame a law on contract farming and are confident that it would become a reality soon,” the  official said.
 
Agriculture Minister Radha Mohan Singh, in an interaction with reporters, said the model law on contract farming will be formulated to make improvements in the policies related to agriculture.

 
At present, the model APMC Act has a provision to allow contract farming but the official said idea behind a separate model law is to ensure that APMCs themselves do not  become arbitrators on contract farming.
 
“That apart, at present, most laws on contract farming framed by the state governments concern include one or two farm commodities and is only limited to marketing. But our model law will include all farm commodities and also will have a comprehensive piece of legislation starting right from distribution of seeds,” the official said.
 
The second legislation, which is a new model APMC Act, to replace the existing law is also in the advanced stage of formulation. Officials said it could be a big improvement from the existing APMC Act,  which was framed more than a decade back. “The new model APMC Act will incorporate changes and will be more relevant to current market conditions,” said another official.

 
On the model land leasing law, the Centre is persuading state governments to enact it and has got the support of even Opposition party-governed states, such as Congress-ruled Karnataka and Left-ruled Kerala. The Bill in question aims at enabling farmers and farming groups to lease their land for cultivation through a legal document, without dilution of ownership.

Farming reform on the cards
 

• The model law will subsume contract farming from the purview of APMC Act
• The law would cover all the commodities
• It would cover farming right from distribution of seeds to marketing of final produce
• The present contract farming framework available in the country only covers marketing of produce
• Idea behind the separate law is to ensure that APMCs themselves do not  become  arbitrators on contract farming