Cabinet nod for ordinance to allow farmers to engage with processors, aggregators

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Published: June 3, 2020 8:48 PM

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 aims to provide farmers a level playing field to market their produce without any fear of exploitation.

farmers, exporters, retailers, Narendra Singh Tomar,  banana crop, crop diversification, climate changeThe ordinance also proposes to bar state governments from imposing any tax on such transactions.

To encourage farmers to diversify crops in view of climate change and help them get better prices, the Cabinet on Wednesday approved an ordinance to allow farmers to directly market their produce to processors, aggregators, wholesalers, large retailers and exporters.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 aims to provide farmers a level playing field to market their produce without any fear of exploitation.

Announcing the Cabinet decision, Agriculture Minister Narendra Singh Tomar said, “There has been lot of discussion on encouraging crop diversification amid climate change challenges. But crop diversification cannot happen without an assured market. This ordinance will encourage farmers to engage with buyers like processors and large retailers.”

Farmers can now enter into a contract agreement with buyers to sell the produce at pre-determined rates before the sowing, he said.

For instance, a farmer who enters into a contract to sell banana crop at Rs 10 per kg before the sowing, will get the guaranteed price after harvesting. In case the rates remain high in the market after harvesting, farmers will get a share, he added.

According to the minister, it will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs. It will reduce cost of marketing and improve income of farmers.

The ordinance also proposes to bar state governments from imposing any tax on such transactions.

The model contract agreement will be made available in all Indian languages. The disputes will be redressed by the sub divisional magistrate and district collectorate and not in the jurisdiction of civil courts, he added.

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