Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 was recently passed in both the houses which is aimed to provide a legal contract for farmers to enter into written contracts with companies and produce for them.
Main provisions:
- The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field. 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.
- 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.
- It will also enable the farmer to access modern technology, better seed and other inputs.
- It will reduce cost of marketing and improve income of farmers.
- Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
- Impetus to research and new technology in agriculture sector.
Issues of the Bill
- Under contract farming, farmers will be under pressure and they will not be able to determine prices.
- How will small farmers be able to practice contract farming, sponsors will shy away from them.
- The new system will be a problem for farmers.
- In case of dispute, big companies will be at an advantage.
Clarification:
- 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.
- 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
- After signing contract, farmer will not have seek out traders. The purchasing consumer will pick up the produce directly from the farm
- In case of dispute, there will be no need to go to court repeatedly. There will be local dispute redressal mechanism.
