5 Benefits of Contract Farming Law in India

Contract farming has been going on in the country for a long time now, both in formal as well as informal manner, but the Central government has given it a legal basis through a law. A senior government official said that the agreement under the new law will define the quality, grade, price and conditions of services, and therefore will not compromise farmers’ interests.

According to Ashok Dalwai, the president of the committee constituted to achieve the goal of doubling the farmers’ income, the new law emphasizes the interests of the farmers.

In order to make agriculture a profitable avenue, the Centre included the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act as one of the three farm laws. The law will specify the quality, grade, price of crops and conditions of services. Apart from this, the contract will be from one year to five years. The third important feature of the law is that if the price of the crop is more than the price fixed in the agreement, then the market price will be considered as the standard price.

Farmers have been protesting on the borders of Delhi since November 26 demanding the withdrawal of the three farm laws. The leaders of the farmers’ organizations feel these laws will benefit the corporates. Dalwai, the CEO of the National Rainfed Area Authority (NRAA), enumerated five benefits of the farm law:

1) The farmers are not aware of the prices after harvesting the crops, but in the contract farming agreement, the prices will be fixed in advance so that farmers can be assured of getting a fixed price.

2) Farmers will get extension technology through which they will get to know which crop to produce and what variety to produce considering the demand.

3) The responsibility of the service will be taken up by the sponsor or buyer. For example, the sponsor may take up the responsibility for water management, waste management etc.

4) The contract will not be of the land, but only for the crop.

5) In case of any dispute, it will be settled at the gram panchayat level and if it is still not resolved, the matter will be settled at the SDM level.

Farmers demanding the withdrawal of the new farm laws fear that settlement of the dispute at the SDM level will not provide justice to the poor farmers. The government has assured them of adding the provision of going to the civil court in case the dispute is not solved at the level of the SDM.

Was it worth reading? Let us know.