Provision of contract farming in APMC Act in 17 states

New Delhi, Aug 24 (UNI) The Government today told the Upper House that in 17 States/ Union Territories, relevant provisions have been made in the concerned Agricultural Produce Marketing Regulation Acts for providing a legal framework to contract farming and in seven States/ Union Territories there are no regulatory laws preventing such buy-back arrangements.

Minister of State for Agriculture Kanti Lal Bhuria said in a written reply in the Rajya Sabha that the main feature of contract farming is that farmers grow selected crops under a buy-back agreement with an agency engaged in trading or processing.

Contract farming is practised in various parts of the country for crops like sugarcane, cotton, tea, coffee, and others, he added.

The exact extent of land covered under contract farming in the country is not known. The contract farming is reportedly beneficial to the farmers as it takes care of price risk and also helps in mitigating production risk.

In order to make contract farming arrangements beneficial for the farmers, as well as, the sponsoring companies under a legal framework, suitable provisions were included in the Model Agricultural Produce Market Committee (APMC) Act formulated by the Ministry of Agriculture in 2003 and circulated to State Governments for considering suitable amendments in their concerned Act by adopting those provisions.

The Model Act circulated by the Ministry is suggestive in nature, and, since agriculture is a state subject, it is for the State Governments to decide on the implementation of the contract farming arrangements in their state, Mr Bhuria said.

UNI