Contract farming guidelines: Farmer liability is limited

Farmers moving into into contract farming agreement with foodstuff processors and other companies will have liability confined to the progress that they receive or price tag of farm providers provided by the sponsoring company, according to rules on the new make contact with farming ordinance issued by the Agriculture Ministry.

Also the sponsor under no situations can get possession legal rights above the farmers’ land.

The rules have obviously spelt out that the sponsor would be dependable for any decline of hurt to the farming produce, creation web page, belongings and any legal consequence of inputs equipped to farmers. Farmers, on the other hand, can not use inputs provided by the sponsor for anything other than growing the produce which has been agreed on.


These are element of a set of rules that the Ministry came out with for giving a legal framework for the Farmers (Empowerment and Protection) Settlement on Cost Assurance and Farm Solutions Ordinance, 2020, which the federal government passed early final month.

It said the farming agreement really should be for a minimal period of one particular cropping time or a utmost of 5 years. The contract can be outside of 5 years only if the one creation cycle of the crop is far more than 5 years.

The agreement really should obviously show the nature of the farming, dimension of land spot, survey number of the farmer’s subject, enterprise tackle of sponsor, name of the village and tackle of the farmer. The farmers moving into into the agreement really should have obvious title of the land. If the agreement is with a farmer producer organisation (FPO), the rules insist on making certain that the responsibility for the overall performance of the agreement is appropriately assigned amongst the members of the FPO.

Equally, if a sharecropper is associated in the agreement, he or she may be designed dependable for getting and using inputs from the sponsor. No clause in the agreement can be in derogation of legal rights of the sharecropper. The obligation to deliver the contracted quantities would relaxation with the farmer.

If the produce is turned down, the explanations really should be informed by the sponsor to the farmer and give the farmer the prospect to inspect the turned down consignment or have it inspected by a third social gathering. 3rd social gathering may be a certified assayer, Krishi Vigyan Kendra, seed certifying company, or a qualified agriculture scientist.

As for every the rules, if the sponsor fails to choose shipping and delivery of produce in just the stipulated days talked about in the agreement, the farmer may sell the produce to a third social gathering and claim from the sponsor the difference among the cost in the agreement and the precise cost that he received for the produce. Sub-divisional authority can impose penalty up to a hundred and fifty for every cent of the claim on the sponsor.

The produce will have to be purchased at the cost provided for in the farming agreement. The sponsor will have no right to make long lasting modify on the farmer’s subject. But he can make temporary improvements if the farmer agrees and he is obliged to restore the land to its authentic condition just before the expiry of the agreement.

The rules also tension that the farmer of FPO really should make certain that their possession of the land is safe and legally valid just before moving into into an agreement. They really should not opt for selling or switching the possession of the land when in an agreement with the sponsor.

When disputes crop up, the aggrieved social gathering can desire formation of conciliation board. If the situation is not settled in 30 days, it can be escalated to the sub-divisional authority and if that also fails an appellate authority, district collector, can hear the make a difference and the authority’s determination would be ultimate, the rules said.

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