By: Dr. Ripudaman Singh (Special Correspondent ICN Group) & Hemant Kumar ( Agriculture Correspondent ICN Group)
NEW DELHI: Seeking to protect farmers from price volatility by ensuring guaranteed price for their produce, the Centre will come out with a draft model law on contract farming this month. Once it is made public, stakeholders, including farmers, will be given 30 days to comments and give suggestions.
A final ‘model’ contract farming Act is expected to be released in November after incorporating the suggestions. Contract farming is a system in which agro-processing exporting or trading units enter into a contract with farmers to purchase a specified quantity of any agricultural commodity at a preagreed price.
Integration of fruits and vegetable grower with agro-processing units will help farmers not only in getting better price for their produce but also in reducing farming Act was announced by finance minister Arun Jaitley in his budget speech.
Once states adopt the model law, farmers can enter into contracts with private entities buyers who may, in turn invest in technology and quality inputs and even provide management skills to increase productivity and reduce transaction costs.
At present, farmers can suffer losses when a bumper crop causes a glut in the market or in a situation where their produce is unable to reach the ‘mandis’ in time for a variety of reasons.
