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Home Agriculture

The Farmers Agreement on Price Assurance and Farm Services Bill, 2020

October 28, 2020
in Agriculture
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The Farmers Agreement on Price Assurance and Farm Services Bill, 2020
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Recently, Parliament passed the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 

Key features of the bill

  • It  provides a framework for farmers to engage in contract farming, i.e. farming as per an agreement with the buyer before sowing, under which farmer sells produce to the buyer at a predetermined price
  • It allows intra-state and inter-state trade of farmers’ produce beyond the physical premises of APMC markets
  • Period of agreement:
    • The minimum period of an agreement will be one crop season, or one production cycle of livestock. 
    • The maximum period will be five years. 
    • For production cycle beyond five years, the maximum period will be mutually decided by the farmer and the sponsor
  • The price to be paid for purchase of produce may be mentioned in the agreement. In case the price is subject to variation, the agreement must include:
    • a minimum guaranteed price, and 
    • a clear price reference for any additional amount over and above the guaranteed price, including bonus or premium
  • Exemptions: Farming produce under a farming agreement will be exempted from all state APMC Acts and from any stock limit obligations applicable under the Essential Commodities Act, 1955.
  • It provides for a three-level dispute settlement mechanism: the conciliation board, Sub-Divisional Magistrate and Appellate Authority.
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Source: PRS India
Tags: Prelims

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