A notification issued on August 6, 2019, regarding the Essential Commodities Act, 1955, has amended the Removal of Licensing Requirements, Stock Limits, and Movement Restrictions on Specified Foodstuffs order, 2016 of the Act. With this amendment, persons and firms dealing in contract farming are exempted from the current requirement of licensing and restrictions on stock limit and movement of foodstuff under the 1955 Act.
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Contract Farming means agricultural production that is executed as per an agreement involving the buyer and producers (farmers).
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The change made in the Act has inserted a new sub-clause, which reads. “The provisions relating to stock limit under any order made under the Act shall not apply to a contract farming purchases of any agricultural produce registered under any state Act made in this behalf, subject to the overall ceiling of registered quantity specified thereunder.”
The amendment is in line with the Model Contract Farming Act that was passed in 2018. The Model Act had assured that it would remove the restrictions on licensing, stock limits, and movement of specific food products for those involved in contract farming.
However, in the opinion of experts, these changes are too small to bring any appreciable change to further the cause of contract farming in the country. As per a former agriculture secretary, no contract farming is at present taking place in the country as big corporations are reluctant to work with farmers. This is so because in case of any eventuality of anything going wrong, farmers would not be held accountable, irrespective of who is responsible for the fault.
It is felt that major changes in the entire value chain are needed, and not just little tinkering. Small and medium companies should be able to buy produce at the farm gate directly from the farmers.