Odisha brings ordinances to enable contract farming

Odisha has brought in two ordinances that would allow and facilitate the operation of multiple marketing channels through contract farming joining Uttar Pradesh, Madhya Pradesh, Karnataka and Gujarat who over the last one-and-a-half months have changed their existing agricultural marketing laws for comprehensive reforms in the sector.

The Odisha Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Ordinance, 2020, promulgated by the state government aims at registration of farmers with contract farming companies for improving production and productivity by way of land, soil management, seeds, saplings, fingerlings, inputs, feed and fodder, technology and other such services.

The ordinance covers sale and purchase of 50 varieties of plant produce and five of animal produce.

The Uttar Pradesh cabinet early this month approved a similar ordinance while Madhya Pradesh, Gujarat, and Karnataka have promulgated ordinances to relax regulatory aspects of their agricultural produce market committee laws.

As agriculture falls under the states list of the Constitution, agriculture marketing in most states is regulated by APMCs established by state governments under the respective acts. APMCs provide infrastructure for the marketing of agricultural produce, regulate the sale of such produce and collection of market fees from such sale.

The Odisha ordinance which amends the Odisha Agricultural Produce Markets Amendment Act, 1957 would provide for geographically restriction-free trade and transaction of agricultural produce including livestock across the state and country to give freedom to the farmers to sell their produce in a better manner.

Several amendments have been made in the ordinance.

The government will constitute a committee called the Contract Farming and Services (Promotion and Facilitation) Committee to review the performance of contract farming in the state and to make suggestions to the government for promotion of contract farming activities.

The contract farmer or a group of farmers will get support from the company for improving production and productivity by way of land, soil management, seeds, saplings, fingerlings, inputs, feed and fodder, technology and other such service(s) related thereto as specified in the agreement. A contract-farming facilitation group will be formed for every contract to facilitate in selection of inputs, feeds, good agriculture practices, sorting, grading, packing and delivery of produce and such other pre-production, production and post-production activities of the contracted produce.

Every contract or agreement entered into by a market committee for the purchase, sale, lease, mortgage or acquisition of an interest in the immovable property would be executed by its chairperson, vice-chairperson and the secretary.

The 1957 act provides that in every market area, there should be a market yard, with one or more sub-market yards, for conducting all marketing activities. The ordinance removes this provision and specified that for every market area, there may be: (i) a principal market yard and sub-market yard managed by the APMC, (ii) a private market yard managed by a person holding a license (granted by the director of agriculture marketing), and (iii) electronic trading platforms (where trading of notified produce is done electronically through the internet).

It also said the government may grant a license to establish a private market yard for the trading of notified agricultural produce and livestock, at one or more specified locations in the state. It also said the government may delineate a geographical area for a market committee as a delineated market area. It also disempowered the market committee from regulating the marketing of notified agricultural produce and livestock in its delineated market area.

Unlike the 1957 act, the new ordinance allows the establishment of a farmer-consumer market yard for the marketing of notified agricultural produce in the retail subject to conditions that the consumer would not purchase more than the specified quantity of agricultural produce at a time.

The new ordinance allows collection or aggregation centres in the proximity of farmlands set up by companies with linkages to retail chain, or processing or export unit or premises.

The ordinance provides for the appointment of the director of agricultural marketing by the state government. The director will be responsible for the promotion of contract farming, trading and connected activities for the notified agricultural produce, regulating private market yards and electronic trading platforms. He may also grant licenses for these activities.

It also provides that market fee for trading under licenses granted by the director of agricultural marketing will be levied as prescribed by the state government.

However, farmer leader Ashok Pradhan said the ordinance would not help the farmers in any way.

“It’s a big racket. In the first year of contract farming, the offers would be attractive. After that, the big companies would exploit the small and marginal farmers,” Pradhan, a farmer leader from western Odisha, said.

“The government regulatory mechanism is bound to get lax after a couple of years and farmer will suffer,” he added.

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