What do understand by Contract Farming? Discuss the provisions made in APMC act for promotion of Contract Farming in India.
Model Answer: Contract farming is an agreement between processing and / or marketing firms for production support at production support at predetermined prices. This stipulates that Farmer is committed to provide a specific commodity in terms of quality & quantity as determined by the purchaser. Purchaser is committed to buy the produce as per the contract.
There is a separate chapter in APMC act 2003 on contract farming. It includes Compulsory registration of all contract farming sponsors (such as companies); Recording of contract farming agreements; Resolution of disputes, if any, arising out of such agreement.; Exemption from levy of market fee on produce covered by contract farming agreements Providing indemnity to producers’ title/ possession over his land from any claim arising out of the agreement. The provisions under this chapter enable direct sale of farm produce to contract farming sponsor from farmers’ field without the necessity of routing it through notified markets. (150 words)