The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill

 PROVISIONS 

  • The bill creates a framework for contract farming. 
  • It provides a template at the national level of farming agreements, with regard to agribusiness, processing, and the entire range of services for sale of farming produce at a mutually pre-agreed price through a contract.
  • The services include wholesalers, exporters and large retailers.
  • The Act provides for a three-level dispute settlement mechanism by the conciliation board, Sub-Divisional Magistrate and Appellate Authority.
  • The agreement must provide for a conciliation board as well as a conciliation process for settlement of disputes.

PROS

  • Farmers can enter into a contract with the business persons in advance at a pre-agreed price which will help farmers in fetching a higher prices. 
  • Farmers can transfer the risk of market unpredictability. 
  • Farmers can engage in direct marketing by eliminating intermediaries for full price realization.
CONS
  • Farmers in contract farming agreements will be the weakest player in terms of their ability to negotiate what they need, as they will have less resources and knowledge in contracting. 
  • Being big private companies, exporters, wholesalers, and processes, the sponsors will have an edge in disputes.


SOURCES: TOI, THE WIRE

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