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relationship between the parties. If the government In the event of a force majeure and/or the change in the
intervenes in contract farming agreements frequently, policy of government, the affected party, to the extent of
buyers may back out. adverse impact, shall not be bound to honour the agreement
and can accordingly alter the terms with mutual consent or
The ordinance delegates dispute resolution to the executive terminate the agreement. However the Ordinance leaves
(Sub-Divisional Magistrate), who will not be bound by rules out many sophisticated aspects of modern contract farming
of procedure. This gives the government more powers than practices, like delayed deliveries or purchases, and damage
the parties in the case. That would not happen if disputes therein.
were required to go to the judiciary. Also it seems likely that
individual farmers might not find themselves equipped or 4. Inefficient price discovery as ordinance links
powerful enough to negotiate with big corporates or
the price with APMC mandi price
sponsors to ensure a fair price for their produce.
Approaching the office of Sub-Divisional Magistrate might The ordinance links the contract price with the APMC mandi
be a hurdle for millions of small and marginal farmers who price or electronic market price, which is anti-contract
might get into a farming agreement with a powerful entity. farming in nature. The price, like many other basic aspects
of contract, should be left to the parties to negotiate and
2. Ordinance could lead to disruption of shouldn't be tied to any other channel, especially the APMC
price, as the very rationale for bringing this law was to
ongoing practice of Informal Agreements.
provide alternative channels to farmers and create
Giving legal sanction to contract farming would help competition in APMC markets, as price discovery was not
corporates enter the agriculture sector and may increase
efficient. Now, going back to the same mandi does not speak
productivity. But would it help the tenant farmers and share very well of the Ordinance.
croppers? The ordinance has little to offer to the millions of
farmers who are currently engaged in contract farming
through informal agreements. Conclusion
This farming agreement Ordinance is a bold step by the
Some form of registration of these tenant farmers without government towards agricultural development. By providing
threatening landowners would have been a huge land the legal framework to contract farming enables to solve
reform waiting to happen. Instead, the new ordinance could many agricultural related issues. This Ordinance provides a
lead to disruption in this ongoing practice of contract uniform framework for private investment in market,
farming. The absentee landlord would now prefer to deal without challenging a farmer's ownership right or right to
with written contracts of a company over the hassle of cultivate. This reform has a great potential to improve
dealing with local tenants. farmers conditions and contribute to achieve our Prime
Ministers ambitious target to double the farmers income by
3. Design of contract needs to relook 2022. There are certain concerns in the ordinance in respect
The farm-gate pick-up of produce by buyers has been made of dispute resolution and inefficient price discovery, however
mandatory, which was unnecessary. The parties should be government is confident that the Ordinance definitely will
able to decide themselves whether the farmer will deliver bring new revolution in agriculture sector in coming years.
the produce at factory gate, collection centre, or whether
the buyer would pick up the produce from the farm. References
Y www.pib.gov.in
The ordinance says that the quality parameters can be Y www.thehindubusinessline.com
mutually decided by the two parties in the agreement. But
Y http://timesofindia.com
the quality aspect will become crucial when a few
Y www.scroll.in
corporates will try to usher in uniformity which might end
up adversely impacting the already skewed agro-ecological Y www.theprint.in
diversity in the country. Y Agriculture & Industry survey, May 2016. T

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