Haryana brings in contract farming, with safeguards

Contract farming was formalised in Haryana last week with the Assembly passing the much-awaited amendment to the Agriculture Produce Marketi...

Contract farming was formalised in Haryana last week with the Assembly passing the much-awaited amendment to the Agriculture Produce Marketing Act. This spells good news for Haryana farmers as the Bill keeps in mind all the problems that informal contract farming in Punjab had thrown up.

The amendment to the Punjab Agriculture Produce Markets Act, 2004, showed that the Om Prakash Chautala government in Haryana has learnt a number of lessons from neighbouring Punjab, where contract farming was introduced earlier.

However, while the practice was largely successful there—with some enterprising farmers inking deals with MNCs like Pepsi, Indomint etc—there were cases where farmers were not paid the price promised, or their produce was not lifted at all. With most agreements being in English, a company got enough leeway to exploit the farmers if it wished.

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The amended legislation introduced by the Haryana government, called the Punjab Agriculture Produce Markets (Haryana Amendment) Bill, 2004, seeks to correct this anti-farmer bias inherent in contract farming.

It would also be a move away from the system of regulated markets, reducing the burden on them, and promote agro-based industries.

Under the provisions of the amended Bill, the companies would not only have to commit to a settled price of an agriculture produce but also to its definite purchase. The companies would also need to register with the government prior to signing an agreement with the farmers.

	HIGHLIGHTS

			• Contract farming sponsor has to commit to a price for the produce and to purchasing it • Companies have to register with govt • Takes purchases away from the system of regulated markets • No title, rights of land can be transferred to the sponsor or his agent as a result of the contract farming agreement • A competent appellate authority to hear disputes, settle within 30 days

‘‘The new legislation provides that the contract farming sponsor will be the buyer of the agriculture produce covered under the contract. The business premises of the sponsor would be the private market yard for the purpose of conducting business, unless denotified by the state government by notification in the official gazette,’’ says a senior officer.

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Besides, no title, rights, ownership or possession of land can be transferred or alienated or vested in the contract farming sponsor or his successor or his agent as a result of the contract farming agreement.

Aware that the agreements could lead to disputes between the companies and farmers, the Haryana government also plans to constitute an appellate authority. To ensure that there are no unnecessary delays, all disputes will need to be resolved and a decision taken within 30 days. ‘‘The provision has been made to facilitate the farmers, as they have to decide on the next crop to sow. The period of 30 days gives both the parties ample opportunity to present their case. The decision of the appellate authority would be final,’’ said an officer.

Carrying the decree of the civil court, the decision would be enforceable as such. In fact, disputes relating to and arising out of contract farming cannot be called into question in any civil court.