The Central government, which is planning to unveil yet another legal framework on contract farming, is learnt to have studied Tamil Nadu’s law on the subject.
The reason: Tamil Nadu Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act of 2019 is seen as an improvement over the parent document – the model law prepared by the Union Ministry of Agriculture and Farmers’ Welfare in May 2018. Billed as the first of its type, the State law has got more provisions to safeguard interests of farmers than the latter.
A few days ago, the Central government announced that it would come out with a fresh legal framework on contract farming in the context of COVID-19 relief programmes.
Giving illustrations of the differences between the two legislations, an official of the Agriculture Department points out that in the Tamil Nadu law, there is a provision for the inclusion of three non-official members in the dispute redressal mechanism, called “dispute settlement committee,” apart from government officers.
The three members can be one each representing farmers/farmer producer organisations (FPO), agro-industry and domain experts. But, the Central model law provides only for government officials.
If aggrieved over the decision of the dispute settlement committee, one can go first to the District Collector concerned before approaching the State Contract Farming (Promotion & Facilitation) Authority, whereas the Authority is the only appeallate body under the model law.
Likewise, the Tamil Nadu legislation specifically provides for the inclusion of representatives of contract farming producers or groups at the village panchayat-level in the contract farming facilitation group for every contract, while the the model law deals with the subject only generally.
Under production support system, the model law stipulates that the quantity in excess of pre-agreed quantity is proposed to be purchased by a sponsor at a lower rate [than that of the original quantity] mutually acceptable to both including the producer. But, in the case of the TN Act, the excess quantity has to be purchased at a “mutually agreeable rate” and not “lower rate.”
A “unique feature” of the State law, according to the official, is that in addition to farmers, FPOs or companies (FPC) are allowed to enter into services contract or any such pact with a service contract purchaser.
As regards the status of the 2019 Act which got the assent of President Ram Nath Kovind in October last year, the official replies that the Law Department is scrutinising the draft rules. As soon as it completes the job, the rules will get notified. He says the notification of the rules would have happened much earlier but for the emergence of the COVID-19 pandemic as the focus of the entire State machinery has turned to tackle the crisis.
The rationale behind the concept of contract farming is to ensure that the advantage of scales of economy can be passed on to small and marginal farmers, who will be motivated to pool parcels of their land and undertake collective farming.
