Updated: February 9, 2021 7:38:21 pm
On Friday, Union Agriculture Minister Narendra Singh Tomar had said in Parliament that the protest against the farm laws was an issue in “only one state” where people had become “victims of misunderstanding”, and this had become a “burning issue”.
Moreover, he had compared provisions of a Punjab agricultural Act with that of the Centre. He said that while the Punjab Act provides a jail term for farmers violating the contract, the Centre’s Act penalises the traders.
When was the Punjab Contract Farming Act notified?
The Punjab Contract Farming Act was notified on April 16, 2013, after receiving the assent of the Governor on April 10, 2013. The Bill was brought by the then SAD-BJP government in its second term from 2012 to 2017. “The Act still exists, but it was never implemented. It is still on papers for the past around 8 years as it calls for setting up of a Contract farming Commission (CFS), which will have a chief commissioner and three commissioners before its implementation and government has never set up,” said expert on contract farming issue Professor Sukhpal Singh, Centre for Management in Agriculture, Indian Institute of Management (IIM), Ahmedabad, adding that it is like a “stillborn”. The Act empowers the commission to resolve any dispute between both parties. “There is no relevance in talking about an Act that was never implemented,” he added.
What does the Act provide for?
Under this Act, the contract farming agreement between the buyer, who offers to purchase the produce, and the producer, who agrees to produce the crop and marketing of agricultural produce, is carried out as per some conditions. The buyer has to purchase the crop in accordance with predetermined conditions and shall support the production by supplying inputs, land use, technical advice and other activities. The contract can be for 1 to 3 years.
The buyer will be registered with the local registering authority of the area where the produce will be grown after paying a fee. The buyer will have to submit reports of the contract transactions to the registry authority as well as the commission.
Where can trade be done?
The produce can be sold from the farmer’s doorstep (fields), APMC or any other area mentioned in the contract. The buyer has to make arrangements for packing and weighing of the produce and to hand over the slip to the farmer.
What are the main provisions for trade, farmers and buyers in the Act?
After delivery of the produce, it cannot be rejected and farmers will get a receipt and payment would be made through a cheque/demand draft and electronic payment system on the spot. If the delivery is not made at the spot, it will have to be made within 30 days with interest as prescribed for late payment in the agreement.
Is there a provision for jail term to farmers in the Act?
Yes. If the buyers contravenes the provisions of the Agreement, the Act provides for punishment upto one month or penalty with between Rs 1 lakh to Rs 10 lakh or both. In case a producer (farmer) fails to follow the conditions of the agreement, the Act provides for simple imprisonment of one month or with fine between Rs 5,000 to Rs 5 lakh or both to the farmer. In case the buyer contravenes even after getting convicted, an additional fine of Rs 500 daily after the date of first conviction is levied. While in the case of the producer, the daily fine is Rs 100.
Can farmers go to court in case of dispute?
“No. The district collector will resolve the dispute within 30 days’ time. The Act also bars the jurisdiction of any civil court to entertain any suits or proceedings related to the provisions of this Act and empowers the commission to seize the crop purchased by the buyer,” said Professor Sukhpal.
Is there any provision to protect farmer/ farmer’s land?
Yes. The Act specifically lays out that loans and advances given by the buyer to the producer (farmer) can only be recovered from the sale proceeds of the agricultural produce and in no case by way of sale or mortgage or lease of farm land regarding which the agreement has been entered into.
The Act specifically bars transfer, alienation or vesting in the buyer of any title, rights, ownership or possession as a consequence arising out of the agreement.
How many crops have been notified under the Act for contract farming?
A total of 108 crops of rabi and kharif seasons were notified including main crops of Punjab like wheat, paddy, maize, cotton, vegetables, fruits etc. Professor Sukhpal said, “It was a poorly designed Act in which several crops like baby corn, garlic are left out, while agroforestry, which cannot be done in 3 years’ contract, and jaggery, shakkar and khansari are added, which are not produced but are products of sugarcane.”
The Act is silent about quality issues of the crop, fluctuation of price in the market, and lacks proper homework on the side of the government, said experts.
Why did Punjab bring in this Act?
Punjab was the only state which brought a separate Act on contract farming while other states had added contract farming provisions in APMC (Amendment) Acts.
Former Punjab minister and the official spokesperson of Shiromani Akali Dal (SAD), which had brought this law in its tenure, Daljit Singh Cheema, told The Indian Express that there were some complaints regarding contract farming in Punjab from both buyers and sellers since 2002, hence a legal framework was needed to safeguard the interests of both parties. “The Act still exists and not a single case of fraud from any side was reported till date,” said Cheema, adding that the main purpose of it was to bring crop diversification in Punjab.
Experts said that in Punjab, farmers sell their produce through arhtiyas (commission agents) and there has always been a conflict on direct payment to the farmers, who get payment through arhtiyas for their produce. Under contract farming, there was the provision of on the spot payment. As arhtiyas were never in favour of paying farmers directly, till date farmers get payment through arhtiyas only, who have to pay through cheque or transferring to the bank accounts of farmers.
What is the argument of the current Punjab government which has opposed the Centre’s three farm laws and had brought in its own last October?
Punjab State Congress Committee (PPCC) chief Sunil Jhakhar said that this Bill was brought by the SAD-BJP, but never implemented in Punjab. He said it will not be implemented in the future too. He also said that when the Union minister Tomar was referring to it in Parliament, he forgot to mention that this law was also brought by BJP and its once ally SAD, in Punjab in 2013.
How experts see both Punjab and Centre’s contract farming Bills?
“Both are the shoddy work of respective governments, and Centre has taken several provisions from the Punjab Act. When one designs a new Act by copying a dead Act, how can that new Act be framed in the right perspective?” asked Prof Sukhpal, adding that in the Centre’s Act “there is confusion over land leasing and provisions of direct purchasing”.
“The provision of linking of bonus and premium over and above the guaranteed price with the mandi prices are mentioned which should not be part of this Act, and the basic factors of contract farming like acreage, quantity, time of payment etc. are not specified,” he added.
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