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.