ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Corporatising Indian Agriculture

The (Repealed) Union Contract Farming Act, 2020

The rationale and the implications of the now repealed Union Contract Farming Act of 2020 and its implications for farmers is the focus of this article. It highlights some major lacunae in it from a design and small farmer perspective informed by experience of contract farming in India. The article argues for better provisions to protect smallholder interests and the need to leverage contract farming for their development.

After more than a year since the agricultural market acts were brought in, first as ordinances in June 2020 and later as acts in September 2020, they have been repealed (GoI 2021). The enactment of these acts was accompanied by farmer protests for their repeal in Punjab since September 2020 which later spread to various states across north India with thousands of farmers putting up at the borders of Delhi for more than a year. After many rounds of talks between the government and the farmer unions, there was a deadlock for more than nine months. Meanwhile, hundreds of farmers lost their lives in this protest. Though there were two new acts, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (commonly known as the Contact Farming Act, 2020) besides the amendment (2020) to the Essential Commodities Act (ECA), 1955, the Contract Farming Act, 2020 was the most controversial as it led to farmer concerns and fears about their land being under threat and the likely corporatisation of agriculture if this act was enforced.

Contract faming has been in practice in India since the 1960s in the seed production sector across states and in other farm products in many states like Punjab, and Haryana since the 1990s with the Pepsi Foods undertaking tomato, chilly, and potato contract farming. Today the practice of contract farming across crops, states and agencies (public, private and multinational) in India is widespread covering dozens of crops and livestock products with hundreds of contract farming projects or schemes, mostly by private domestic and multinational corporations for domestic processing or for export.

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Updated On : 8th Jan, 2022

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