Tamil Nadu becomes first State to enact law on contract farming

News:Tamil Nadu has become the first State in the country to enact a law on contract farming with President giving assent to the Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act.


Features of the act:

  • The act provides for a six-member body called the Tamil Nadu State Contract Farming and Services Authority.
  • The authority would ensure proper implementation of the Act and make suggestions to the State government for promotion and better performance of contract farming.
  • The act safeguards the interests of farmers during times of bumper crop or when market prices fluctuate.The farmers would also be paid a predetermined price which had been arrived at the time of signing agreements with buyers.
  • The farmers could get support from purchasers for improving productivity by way of inputs, feed and fodder and technology. 
  • However,any produce banned by the Centre or State government or the Indian Council of Agricultural Research would not be covered under contract farming.

Additional information:

About Contract Farming:

  • Contract farming refers to varied formal and informal agreements between producers and processors or buyers. 
  • It may include loose buying arrangements, simple purchase agreements and supervised production with input provision with tied loans and risk coverage.
  • Contract farming usually involves the following basic elements – pre-agreed price, quality, quantity or acreage (minimum/maximum) and time.

Advantages of Contract Farming:

  • The farmers get high remunerative price for their farm products.
  • It promotes best agri practices from different parts of the world.
  • It will free farmers from middlemen and money lenders.
  • Farmers income security through guaranteed price and access to quality inputs.
  • Encourages new generation to take farming as new business ventures instead of migrating to cities in search of jobs.