‘Model Act on Contract Farming’ will encourage entry of private sector

As per agriulture ministry, the adoption of contract farming under the new model act released in May 2018, will help in mitigating the price risk and market uncertainties, thus encouraging entry of private players into the farm sector

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New Delhi: The union government has formulated and released a progressive and facilitative ‘Model Contract Farming Act’ in May, 2018 for its adoption by the states and union territories.

“The State/ UT Agricultural Produce & Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018” covers the entire value and supply chain from pre-production to post harvest marketing including services contract for the agricultural produce and livestock.

As per the Minister of State for Ministry of Agriculture and Farmers Welfare Mr Gajendra Singh Shekhawat, the Model Act being a facilitative one with wider scope of contracts in the entire agri-value chain starting from pre-production, production to post-production, private players including Farmer Producer Organizations (FPOs) will be encouraged to engage themselves in the contract farming and services contracts under the Act.

“The contract farming under this model, will help in mitigating the price risk and market uncertainties through advance agreements and would encourage entry of private players into the farm sector, ” stated the minister in the Parliament.

Giving a background of the activities that shaped the Act, Mr Shekhawat explained: “The first draft of Model Contract Farming Act was circulated to stakeholders to solicit their comments. In addition, it was also placed on public domain in December, 2017 by uploading on departmental website for extensive consultations with various stakeholders including farmers, trade & industry, economists, policy makers.”

The minister informed that it elicited huge response from within India and from abroad. Based on suggestions received, draft model Act was modified and placed again in public domain in February, 2018 for soliciting further comments and suggestions. The incorporation of all inputs finally led to the shaping of “The State/ UT Agricultural Produce & Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018” in May, 2018.

The government convened a meeting of State Agriculture Marketing Ministers’ in May, 2018 under the chairmanship of Union Agriculture Minister to release the model Act for adoption. There was unanimity among the states to adopt this Model Act, said Mr Shekhawat.