The government on Friday notified two key ordinances to kick in agriculture reforms and help farmers trade freely and get better prices.
“The President of India has promulgated the following Ordinances with the aim of giving a boost to rural India for farmers engaged in agriculture and allied activities,” an official statement said.
The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020 aims to promote barrier-free inter-state and intra-state trade in agricultural produce.
Whereas the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020 empowers farmers to engage with processors, aggregators, wholesalers, large retailers and exporters through advanced agreements on pre-agreed prices.
Agriculture Minister Narendra Singh Tomar on Friday wrote to all chief ministers, seeking cooperation in implementation of the reforms.
He stressed the need for their continued support in the development and growth of the agriculture sector in the new reformed environment.
“When the whole ecosystem of agriculture and its allied activities was tested during the COVID-19 crises, it reconfirmed the necessity for the Central Government to speed up the reform process and to come up with a national legal facilitative ecosystem to improve intra-state and interstate trade of agriculture produce,” the statement said.
The Centre also recognised the need for the farmer to sell agriculture produce at a place of his choice at a better price by increasing the number of prospective buyers.
“A facilitative framework was also considered necessary for farming agreements. Thus the two ordinances have been promulgated,” it added.
According to the Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance, any farmers or trader or electronic trading and transaction platform will have the freedom to carry on the inter-state or intra-state trade and commerce in farmers’ produce in a trade area.
Except the farmer producer organisations (FPOs) or agri-cooperatives, no trader will be allowed to trade in any scheduled farmers’ produce without a permanent account number (PAN) or other notified documents.
Every trader who transacts with farmers should make payment on the same day or within the maximum three working days.
Whoever contravenes this provision will be liable to pay a penalty of minimum Rs 25,000 and maximum of Rs 5 lakh. If violation continues, Rs 5,000 per each day penalty will be imposed.
The Ordinance provides for setting up of an electronic trading platform. Any person having PAN or notified documents and FPOs /farm cooperatives can establish such a platform to facilitate inter-state and intra-state trading in scheduled farmers’ produce in a trade area.
They will be allowed to operate provided they follow fair trade practices such as mode of trading, fees and technical parameters.
Any person or organisation violating e-trading platform provisions will be liable for a penalty of minimum Rs 50,000 and maximum Rs 10 lakh. If contravention continues, further penalty of Rs 10,000 for each day will be imposed.
The Ordinance provides for dispute resolution mechanism before the sub-divisional magistrate and district collector. The disputes have been kept outside the jurisdiction of civil courts.
The Ordinance has a provision for suspension of an e-trading platform for breach of fair trade practices by central or state government officers.
The trade outside notified mandis have been exempted from any levies.
According to the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, a farmer can enter into a written farming agreement for supply of farm produce at a pre-agreed price.
But no farming agreement should be entered by a farmer in derogation of any rights of a sharecropper (tiller or occupier of farm land) and it should be for a minimum period of one crop season or one production cycle of livestock and maximum shall be five years.
The central government will issue guidelines along with model farming agreements for the purpose of facilitating farmers to enter into written farming agreements.
The agreement should clearly specify the price to be paid for the purchase of a farming produce and to clear reference for any additional amount over and above the guaranteed price.
Under the agreement, the delivery of the farm produce should be taken by the sponsor at the farm gate and within agreed time, the ordinance said.
The sponsor will have to inspect the quality or any other feature of such produce as specified in the farming agreement.
The agreement has been exempted from the application of any state law for the purpose of regulation of sale and purchase of the produce.
No farming agreement will be allowed to enter for transfer, including sale, lease and mortgage of the farmland and for making modification or construction in the land.
The farming agreement may be linked with the insurance or credit instrument under any scheme of the central or state government.
The agreement can be altered or terminated on mutual consent. And a state government may notify a registration authority to provide for e-registry of the same.
The Ordinance provides for a conciliation board for dispute settlement. But no action for recovery of any amount will be initiated against the farm land of the farmer.
The farming agreement has been kept outside the jurisdiction of civil courts.