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Union Govt. releases Model Contract Farming Act 2018

Published on May 23, 2018
The Union Agriculture Minister Radha Mohan Singh released the final Model Act titled ‘The State/UT Agricultural Produce and Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018’.
  • The proposed law was unveiled here in presence of agriculture marketing ministers from many states including Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Haryana, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh.
  • This act intends to integrate farmers with agro-industries and exporters for better price realization through mitigating market and price risks.
  • Once adopted by states, it will formally facilitate entry of private players into the farm sector.
  • It would induce competition and ensure assured and better price of farm produce to farmers through advance agreements. 
  • It can offer assured price to farmers and save them from adverse situations where farmers have to go for distress sale when bumper crops cause glut in the market.
  • At present, some states have limited formal contract farming while some others have informal practices.
  • It’s currently being implemented in a limited manner under provisions of the Agricultural Produce Market Committee (APMC) Act in certain states.
  • The model act keeps the contract farming outside the ambit of the APMC Act.
  • It also provides for a major role for Farmer Producer Organization (FPO) or Farmer Producer Company (FPC) in promoting contract farming.
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