Keen to spur investments in the farm sector, the government is looking at revamping the decade-old model Agriculture Produce Marketing Committee Act and carve out the provisions on contract farming into a separate law.
The agriculture ministry in consultation with states and government's think tank NITI Aayog will come out with a separate Contract Farming Act, along the lines of that in Punjab, and a fresh draft of the model APMC Act to roll out the series of reforms proposed by the Aayog for the politically sensitive agriculture sector. All other sources of farm income would continue to be under the APMC law. The move comes after several states expressed reservations on certain provisions of the existing Act. It is also part of the government's initiative to double farmers’ income in five years.
"We will relook at the model APMC Act and come out with a fresh draft in three months to completely liberalise the sector in a way that it addresses concerns of all states," NITI Aayog member Ramesh Chand said after the first national consultation with states on agriculture reforms.
According to Chand, the agriculture sector needs the entry of private players to induce competition, which in turn would fetch better returns to farmers. Some states have apprehensions on the contract farming provisions while some have reservations on the proposal of a single levy. States like Punjab are worried about revenue loss under the existing APMC Act. “We have taken the views of all states and would rework the new model APMC Act accordingly to take all states on board,” Chand said.
The original blueprint laid out by NITI Aayog and approved by the Prime Minister’s Office had proposed liberal contract farming, direct purchase from farmers by private players, direct sale by farmers to consumers, single trader licence, single point levy of taxes and taking fruits and vegetables out of the mandi laws as part of agriculture marketing reforms that could unshackle the sector.
As part of a three-pronged strategy to usher in reforms in agriculture in the short run, NITI Aayog has proposed land leasing and forestry reforms along with agriculture reforms to push the sector onto a higher growth trajectory.
The agriculture ministry in consultation with states and government's think tank NITI Aayog will come out with a separate Contract Farming Act, along the lines of that in Punjab, and a fresh draft of the model APMC Act to roll out the series of reforms proposed by the Aayog for the politically sensitive agriculture sector. All other sources of farm income would continue to be under the APMC law. The move comes after several states expressed reservations on certain provisions of the existing Act. It is also part of the government's initiative to double farmers’ income in five years.
"We will relook at the model APMC Act and come out with a fresh draft in three months to completely liberalise the sector in a way that it addresses concerns of all states," NITI Aayog member Ramesh Chand said after the first national consultation with states on agriculture reforms.
According to Chand, the agriculture sector needs the entry of private players to induce competition, which in turn would fetch better returns to farmers. Some states have apprehensions on the contract farming provisions while some have reservations on the proposal of a single levy. States like Punjab are worried about revenue loss under the existing APMC Act. “We have taken the views of all states and would rework the new model APMC Act accordingly to take all states on board,” Chand said.
The original blueprint laid out by NITI Aayog and approved by the Prime Minister’s Office had proposed liberal contract farming, direct purchase from farmers by private players, direct sale by farmers to consumers, single trader licence, single point levy of taxes and taking fruits and vegetables out of the mandi laws as part of agriculture marketing reforms that could unshackle the sector.
As part of a three-pronged strategy to usher in reforms in agriculture in the short run, NITI Aayog has proposed land leasing and forestry reforms along with agriculture reforms to push the sector onto a higher growth trajectory.