Lok Sabha Question No. 257 (STARRED), answered on 2017-08-02
Subject: Contract Farming
Ministry: PLANNING
Asked by: SUMEDHANAND SARASWATI, SANTOSH AHLAWAT

## GOVERNMENT OF INDIA MINISTRY OF PLANNING

## LOK SABHA STARRED QUESTION NO. *257 TO BE ANSWRED ON 02.08.2017

## CONTRACT FARMING

## *257. SHRI SUMEDHANAND SARASWATI; SHRIMATI SANTOSH AHLAWAT

Will the Minister of PLANNING be pleased to state:

- (a) whether NITI Aayog is drawing up a model law of contract farming to protect  farmers against price volatility, particularly in perishables items like onions, tomatoes and potatoes;
- (b) if so, the details and the present status thereof;
- (c) whether  the  new  model  law  would  be  an  improved    version,  keeping  in  mind  utmost safeguard for small and marginal farmers and if so, the details thereof;
- (d) whether  besides  the  law  of    contract  farming,  States  will  also  be  urged  to  de-notify perishable  items  like  fruits  and  vegetables  from  the    Agricultural  Produce  Market  Committee (APMC) Act so that  farmers can sell their products in the open market for better prices; and
- (e) if so, the details thereof?

## ANSWER

MINISTER OF STATE (INDEPENDENT CHARGE) FOR MINISTRY OF PLANNING AND MINISTER OF STATE FOR MINISTRY OF HOUSING & URBAN AFFAIRS

(RAO INDERJIT SINGH)

- (a) to (e): A Statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) to (e) LOK SABHA STARRED QUESTION NO.  *257  FOR 02.08.2017 RAISED BY SHRI SUMEDHANAND SARASWATI; SHRIMATI SANTOSH AHLAWAT REGARDING CONTRACT FARMING

(a) & (b)  In order to integrate fruits and vegetable growers with agro- processing units for better  price  realization    to  the  farmers  and  reduction  of  post-harvest  losses,  the  Union  Finance Minister in budget speech for 2017-18 announced to formulate  a Model 'Contract Farming Act' and circulate the same to the States for its adoption.  In pursuance, a Committee has been constituted in  the  Department  of  Agriculture,  Cooperation  &  Farmer  Welfare  (DACFW),  Ministry  of Agriculture & Farmers Welfare under the Chairmanship of Additional Secretary of  the Department to  draft a holistic, progressive and facilitative Model Law on Contract Farming to, inter alia, protect the farmers against price  volatility, more so in perishables fruits and vegetables.  Representatives of  NITI  Aayog,  Department  of  Revenue,  Ministry  of  Finance  and  progressive  States  are  the members of the Committee. The 1 st meeting of the Committee has already been held on 19 th April, 2017.

(c) The new Model Law on Contract Farming would not only be improved version of existing provisions made in Model Agricultural Produce Marketing Committee (APMC) Act, 2003, but also be a holistic, progressive and facilitative law, providing equitable safeguard to both farmers and contract  farming  sponsors.  It  would  also  address  the  issues  relating  to  fixing  of  pre-agreed  & payment prices, delivery of entire produce of farmers, immediate payment and quick & accessible dispute resolution mechanism.

(d) & (e) In order to provide freedom to the farmers to sell their fruits & vegetables to the buyers and channels of their choice, facilitating the development of alternative marketing channels for better and competitive prices to farmers, Government is urging the States to deregulate marketing of fruits & vegetables outside the market yards with additional option of selling the same in the mandis.      So  far,  14  States  have  deregulated/delisted  and  exempted  market  fee  on  fruits  and vegetables, though in varied ways.  The details are given at Annexure-I.

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## State-wise  status  on  deregulation/  delisting  and  exemption  of  market  fee  on  Fruits &Vegetables:

1. Assam has   cancelled Fruits and Vegetables from the relevant Schedule of the State APMC Act on 13.1.2014.
2. Delhi has ceased regulation outside redefined market yard'/ sub-yards'   area of APMC, MNI, Azadpur, APMC, Keshopur and APMC Shahdara w.e.f  02.09.2014.
3. Chhattisgarh has exempted the market fee on Fruits and Vegetables w.e.f 19.12.2012    till further order.
4. Gujarat has cancelled   Fruits and Vegetables  from the schedule appended to the APMC Act on 16.04.2015 and has recently imposed user charge.
5. Himachal Pradesh has on 14.1.14, exempted mandi fee on all Fruits and Vegetables except Apple. Later on State  imposed service charges in place of market fee.
6. Haryana  on 7.2.2014  reduced  market  fee  (1%)  and  HRDF  (1%)  on  all  Fruits  and Vegetables from 1% to 0%.
7. Karnataka amended its State APMC Act on 04.01.2014 providing therein that no market fee  is  leviable  on  Flowers,  Fruits  and  Vegetables.    Instead,  the  Market  Committee  may collect user charges in respect of above articles
8. Madhya Pradesh has on 27.01,2012 put Fruits and Vegetables outside the ambit of market regulation  when purchased  or  sold  outside  the  notified  market  yard  while  continuing regulation on trade transactions taking place in the notified market yard.   Subsequently, vide notification dated 8.11.2012, de-regulation on marketing of banana outside notified market yard was withdrawn.
9. Maharashtra through an ordinance on 5 th July, 2016 made the provision in the Act  that marketing of fruits, vegetables  and condiments, spices and others (ginger, garlic, coriander and chillies) by any person outside the market shall not require any license or permission, and marketing of above agricultural produces shall not be regulated by Market Committee.
10. Meghalaya has  omitted  Fruits and Vegetables (except Potato) from the Schedule of the Meghalaya Agricultural Produce Market Act, 1982 on 15.01.2014.
11. Nagaland has  on  06.08.2013  exempted  collection  of  market  fee  on  all  Horticultural Commodities.
12. Odisha  has excluded  Fruits  and  Vegetables  from  the  definition  of  notified  agriculture produce on  16.02.2015.
13. Rajasthan has on 05.06.2013 reduced market fee to 0.01 % on Fruits and Vegetables and later imposed user charge.
14. West Bengal has excluded Fruits and Vegetables from the Schedule of the State APMC Act for the purpose of not levying the market fee in the State on 27.11.2014.

Note: In  Bihar,  Kerala,  Manipur  and  Union  Territories  (except  Chandigarh),  there  is  no APMC  Act  hence  there  is  no  regulation  on  marketing  of  Fruits  and  Vegetables. Further, in Sikkim and J&K, APMC Act is not implemented.