The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 was passed by the Parliament and it replaces Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020.
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 provide for a national framework on farming agreements (contract farming) that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner and for matters connected therewith or incidental thereto.
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020 will come into force from 5th June, 2020.
Why The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020 was introduced?
The main challenges in Indian Agriculture sector are:
- fragmentation due to small holdings,
- dependence on weather,
- uncertainties in production,
- unpredictable market
This makes agriculture risky and inefficient in respect of both input and output management.
These challenges cab be addressed by:
- way of realising higher productivity,
- cost effective production
- efficient monetisation of the produce to increase the farmers' income.
- de-risk agriculture at various stages,
- enable scaling of investment by industry for production and processing of high value agriculture produces,
- give fillip to exports and help farmers to enjoy the additional benefits of operational efficiency.
What are the main provisions of The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020?
The main provisions of The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 are:
- 1) The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field.
- 2) Price assurance to farmers even before sowing of crops. In case of higher market price, farmers will be entitled to this price over and above the minimum price.
- 3) It will transfer the risk of market unpredictability from the farmer to the sponsor. Due to prior price determination, farmers will be shielded from the rise and fall of market prices.
- 4) It will also enable the farmer to access modern technology, better seed and other inputs.
- 5) It will reduce cost of marketing and improve income of farmers.
- 6) Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
- 7) Impetus to research and new technology in agriculture sector.
Doubts related to The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020
The Bill has faced nationwide protest from farmers as they have following doubts related to it:
- 1) Under contract farming, farmers will be under pressure and they will not be able to determine prices.
- 2) How will small farmers be able to practice contract farming, sponsors will shy away from them?
- 3) The new system will be a problem for farmers.
- 4) In case of dispute, big companies will be at an advantage.
Clarification provided by the government to address doubts:
- 1) The farmer will have full power in the contract to fix a sale price of his choice for the produce. They will receive payment within maximum 3 days.
- 2) 10000 Farmer Producer organizations are being formed throughout the country. These FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce.
- 3) After signing contract, farmer will not have seek out traders. The purchasing consumer will pick up the produce directly from the farm.
- 4) In case of dispute, there will be no need to go to court repeatedly. There will be local dispute redressal mechanism.
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