Centre pushes for agri-market reforms, contract farming

The Budget on Wednesday pushed for agri-marketing reforms by urging states to de-notify fruits and vegetables from laws governing wholesale markets and to adopt contract farming practices.

Despite stiff opposition from the state governments, Finance Minister Arun Jaitley made a strong pitch for a model law on contract farming to integrate fruits and vegetables growing farmers with agro-processing units for reduction of post-harvest losses. “A model law on contract farming will be prepared and circulated among the states for adoption,” Jaitley said.

He also announced expansion of electronic National Agriculture Market (e-NAM) to cover 585 wholesale markets from the current 250 markets. In order to exclude perishable commodities such as fruits and vegetables from the ambit of the Agricultural Produce Market Committee (APMC) Act, the Centre has been urging state governments to amend the Act.

As many as 20 states have amended the APMC Act, but only 12 have notified the amendments. Some states that have notified the amendments have excluded the key produce of the region from the ambit of the Act. For example, Himachal Pradesh has kept Apple within the ambit of the APMC Act, while excluding other fruits from the law.

The states believe that contract farming will benefit the corporate sector more than the farmers and so they have voiced opposition. The Centre will have to address these apprehensions before rolling out the model contract farming law.