Agri Business

Contract farming produce exempted from restrictions

Our Bureau New Delhi | Updated on August 08, 2019 Published on August 08, 2019

Persons and firms engaged in contract farming agreements with farmers are exempted from the existing licensing and restrictions on stock limit and movement of foodstuff under the the Essential Commodities Act, 1955, a gazette notification has said.

However, experts felt this is a piecemeal approach and will not do much to promote contract farming, which is almost non-existent in the country.

The notification issued on Tuesday said the Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs Order, 2016 of the Essential Commodities Act is amended in favour of contract farming purchasers.

Subsequently a new sub-clause was inserted, which read: “The provisions relating to stock limit under any order made under the Act shall not apply to a contract farming purchaser of any agricultural produce registered under any State Act made in this behalf, subject to the overall ceiling of registered quantity specified thereunder.”

It may be recalled that the Model Contract Farming Act passed in 2018 had promised to remove the restrictions on licensing, stock limits and movement of specific food products for those engaged in contract farming.

‘Piecemeal approach’

Siraj Hussain, former agriculture secretary, said that currently no contract farming is being undertaken in the country. Big corporations do not want to engage with farmers as in the eventuality of anything going wrong, everybody, including the government, would back the farmers, irrespective of who is in the wrong, he said.

Even though it is a piecemeal thing, it is a good beginning, the former agriculture secretary said, adding that people like him have been urging the government to keep the Essential Commodities Act at abeyance for 5-7 years so that companies would come forward to create key infrastructure such as storage facilities.

‘Ad hoc measures’

Pravesh Sharma, a bureaucrat-turned-entrepreneur, on the other hand, said such ad hoc measures would not be of much help. “What we need is an ecosystem change so that small to medium firms are in a position to buy produce at the farm gate from farmers,” Sharma said.

No good will come from tinkering here and there and not bringing changes in the entire value chain, he added.

Published on August 08, 2019
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