The Cabinet decision on contract farming will not only spur private investments in agriculture but also free up farmers from the clutches of APMCs and encourage them to produce quality produce, say stakeholders.
At present, even the farmer producer organisations (FPOs) or producer companies (PCs) are required to seek permission from the APMC of their respective jurisdictions before entering into any direct sale agreement under contract farming.
Farmers can now have direct association with the processors or exporters. This is a big boost for the FPOs that can engage in processing and marketing activities, said Kuldeep Solanki, in charge CEO of Ahmedabad-based Gujpro Agri-Business Consortium producer company that has over 30 FPOs associated with it, covering about 45,000 farmers across the State.
The government’s decision to provide a level playing field to farmers by allowing them to engage with processors, aggregators, retailers, and exporters without exploitation is seen as a game changer in farm trade.
“This opens up new avenues for processing and marketing while it also opens a warehousing avenue for farmers. This is a big benefit,” Solanki said. “However, the next step will be to do capacity building of these FPOs by connecting them with appropriate ecosystem. Improve their marketing and processing capabilities. There is a need to provide handholding to compete with the established players,” he added. “It will spur more investments into contract farming,” said Pankaj Khandelwal, CEO of INI Farms, the largest exporter of pomegranates and bananas.
“It will bring in a lot more entities that are serious about contract farming, who want to improve the quality of produce. Also, it will help motivate farmers in producing safe food,” said Khandelwal, whose firm works with over 3,000 farmers.
He added that the commercial and legal framework, mainly the dispute resolution at the local level, is a creative solution.
Karthik Jayaraman, Co-founder, Waycool, said, “We are waiting for details. But directionally, it is a positive step.”
Need for clarity
Kurubur Shantkumar of Raitha Mitra FPO said contract farming with a pre-determined pricing will be a welcome step.
However, there is a need for more clarity on the dispute resolution mechanism and who would compensate for probable loss of crop or quality during the cropping cycle due to erratic climate pattern or pest attacks, he said.
A letter from the Editor
The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.
Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.
In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.
We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.
But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.
I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.
A little help from you can make a huge difference to the cause of quality journalism!
Support Quality Journalism