The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

On 14th September 2020, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 was introduced in Lok Sabha by Union Minister of Agriculture & Farmers’ Welfare, Rural Development & Panchayati Raj, Shri Narendra Singh Tomar. The bill was passed in Lok Sabha on September 17, 2020. The bill is aimed at transforming agriculture in the country and raising farmers’ income. It replaces the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Ordinance, 2020 promulgated on 5th June 2020.

 Provisions of the Bill

  • It seeks to provide for a national framework on farming agreements.
  • It protects and empowers farmers to engage with agri-business firms, wholesalers, exporters, processors, large retailers for farm services.
  • It enables the farmers to sale their future farming produce at a mutually agreed price in a fair and transparent manner.
  • It provides for an effective dispute resolution mechanism transparent time lines for redressal.

Background

Agriculture in India is highly fragmented because of its small holding sizes. It highly depends on weather. There also exists production uncertainties and market unpredictability. Thus, agriculture is highly risky here and inefficient in input & output management. Thus, this bill has been introduced in order to transfer the risk of market unpredictability from the farmer to the sponsor.

Benefits

It will empower farmers to engage with processors, wholesalers, aggregators, wholesalers, large retailers, exporters. It will also create a level playing field without fear of exploitation. It will also reduce marketing costs and double the farmers income. The legislation will also act as a catalyst to attract private sector investment for building supply chains. As a result, Farmers will get access to technology and advice for high value agriculture.  Farmers will be engaged in direct marketing.