Contract farming works informally in the Indian economy. Although it benefits farmers by providing assured market transactions for an acceptable quality of produce, the lack of a written contract adversely affects the interests of farmers who are vulnerable to exploitation by those with capital in their possession.
To ensure better price to farmers, the Centre today unveiled a model law on contract farming and services not only in agriculture crops but also in livestock, dairy and poultry products.
A senior Agriculture Ministry official said, the Centre will finalize the draft contract farming law in the next few days after incorporating comments from the industry and stakeholders.
To beat the higher investments and low returns, some farmer of Marathwada, had adopted the group farming model.
Prime Minister Narendra Modi called for greater private investment in contract farming and sourcing of raw materials, extolling India’s diverse strengths in agriculture, the country has the world’s second-largest arable land area and 127 diverse agro-climatic zones.
Even as crops offer diminishing returns to farmers, lease rentals on farmland in Punjab’s Malwa region continue to remain 25-30 per cent higher than Doaba and Majha, forcing farmers into a debt trap they find hard to escape.
NEW DELHI: The Niti Aayog is drawing up a model law on contract farming for approval by the Cabinet by June, in a move intended to protect farmers against price volatility, particularly in perishables like onions, tomatoes and potatoes.
Finance Minister Arun Jaitley announced the proposed model law on contract farming in his Budget speech. This could encompass all the agricultural commodities and not restrict itself to only one or two commodities.
To control mounting prices of food, especially pulses, back home and bolster economic ties with the continent while avoiding the contentious issue of leasing land, India plans to take its cooperative or contract farming model to Africa.
India will identify a network of farmers with the help of local agents and help them with seeds and other improvements under the cooperative model. These farmers will also be assured of New Delhi buying their product at a rate not less than the minimum support price of the same produce in India.
Officials says that, this policy will help the country stay away from the politically sensitive issue of leasing land for farming.
During Prime Minister Narendra Modi’s visit, when India enters into a government-to-government pact with Mozambique to import pulses, the first phase of this policy will be inaugurated on July 7.
Now a days India faces a shortage of 7.6 millions of tonnes of pulses, to meet the shortage, a staple source of protein for many and has been taking several import measures. On many counts, looking at Africa for import is a viable option. Africa has almost 60% of the world’s uncultivated arable land. And this agriculture cooperation will also help leverage economic ties between India and countries in the continent.
Indian official said that, India believes to ensure a steady supply of agriculture produce, replicating its contract or cooperative model in farming is the best option available. What is being looked at with Mozambique can be expanded to other countries.
The plan is to step up the cooperation in phases in the case of Mozambique. The secretary of economic relations in the ministry of external affairs, Amar Sinha said, “Now we are looking at the import of 100,000 tonnes of pulses from Mozambique. But the idea is to grow the network of farmers.”
The sources said, “There are many countries such Tanzania, Kenya, Malawi, where we can explore the idea of cooperative or contract farming. Ensuring food security is the primary responsibility of any government.”
There are many African countries that India is looking at replicating what is planned in Mozambique.
Source: http://www.hindustantimes.com/
