Contract farming can boost agriculture

The move to give a legal framework to contract farming is expected to boost the country’s agricultural sector. The Niti Aayog has prepared a draft bill which legalises the leasing of land and thus frees up tracts of land which now lie uncultivated for various reasons. The central government has supported the proposal. The draft is a model bill which governments can adapt to suit the particular circumstances availing in different states. States ruled by the non-NDA parties have also supported the main idea of the bill. It is estimated that about 2 crore hectares of land which is lying fallow in the country can be brought under cultivation  if the bill becomes law. There are some who even feel that it can bring in another Green Revolution. It will help address some problems which have characterised farming in the country, especially in the last few years.

Many land owners prefer to leave their land uncultivated because of the fear that they may not get the land back if it is given on lease. An intending lessee is also discouraged by the possibility of the owner demanding return of the land at short notice or before he has made any returns on his investment. If leasing and contract farming are legalised, there will be no reason for worries and concerns in this respect on both sides. If security of both ownership and lease is assured, other problems that have dogged farming can be effectively solved. Fragmented holdings can be taken on lease by a lessee to create larger farms which will be optimal and economically viable. Mechanisation and introduction of modern techniques of farming will be possible. This can solve the problem of lack of skilled farm labour in some places. Long-term agreements between the owner and the lessee can also facilitate creation of basic facilities, irrigation plans etc. Lessees who will, in fact, be entrepreneurs will also be able to avail of government aid, credit, insurance and other facilities better than individual farmers. Contract farming can also be extended to dairy, fish farming and other areas. 

The Niti Aayog has proposed some other reforms also like changes in the APMC Act and rationalisation of taxes on commodities. The aim is to take agriculture out of the small range of growth which has characterised it and to deal with the uncertainties connected with it. It can attract new entrepreneurs, including youth, to agriculture. Greater public investment in the form of infrastructure and irrigation and private investment in areas like contract farming can improve the state of agriculture in the country by turning it into a profitable enterprise.

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