September 12,2017:
Model Contract Farming Act was announced by Arun Jaitley Finance Minister in his budget speech.
Seeking to protect the farmers from the price volatility by ensuring guaranteed price for their produce, Centre will come out with a draft model law on the contract farming this month.
Once it is made public, the stakeholders including farmers will be given 30 days to comment and give the suggestions. A final 'model' contract farming Act is expected to be released in November,2017 after incorporating the suggestions.
The Committee which is working of the draft headed by the Senior IAS Officer, Ashok Dalwai has stated that,"Final Model Act will serve as a guide for the States to bring the required legislation on contract farming. Many States including Uttar Pradesh have shown the eagerness in adopting it as early as possible".
Contract farming is a system in which the agro-processing/exporting or the trading units enter into a contract with the farmers to purchase a specified quantity of any agricultural commodity at a pre-agreed price. Integration of the fruits and the vegetable growers with the agro-processing units will help the farmers not only in getting better price for their produce but also in reducing the post-harvest losses.
A member of the Committee has further added that,"Idea of contract farming law is to protect the farmers from price volatility, particularly in case of the perishable items. Such a law will protect the farmers from the market fluctuations as it will ensure the assured and the better price of the agricultural and the horticultural produce to them through the advance agreements".
Once the States adopt Model Law, farmers can enter into the Contracts with the private entities/buyers who may, in turn, invest in the technology and the quality inputs and even provide the management skills to the increase productivity and the reduce transaction costs.
At present, the farmers can suffer losses when a bumper crop causes a glut in market or in a situation where their produce is unable to reach 'mandis' in time for a variety of the reasons.
Though Punjab had enacted a law on the Contract Farming in the year 2013, it has so far not implemented it. States like Gujarat, Haryana, Karnataka, Maharashtra and Madhya Pradesh have done this through the amendments to their existing laws on the agricultural marketing for the select crops.
Source PTI
Model Contract Farming Act, 2017 Draft by Latest Laws Team on Scribd
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