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Contract Farming Bill will introduce multi-middlemen in system: AIKSCC

The 'third party' mentioned in the Contract Farming Bill has been left undefined and they can be any persons/intermediaries, said All India Kisan Sangharsh Coordination Committee (AIKSCC).

Written by Anju Agnihotri Chaba | Jalandhar | December 8, 2020 10:14:45 am
(BKU) Dakaunda general secretary Jagmohan Singh (file)

While the Centre has said that the Contract Farming Bill will remove intermediaries from the process of sale of farm produce, farmer organisations that are protesting under All India Kisan Sangharsh Coordination Committee (AIKSCC) in Delhi have argued that the Bill will introduce multiple middlemen in the new system.

In Punjab, arhtiyas (commission agents) acts as intermediaries between the government and farmers or private players and farmers, for purchase of different commodities.

Section 2 (g) of this Bill says: “A farm agreement is to be between a farmer and a sponsor or a sponsor or any third party prior to the production or rearing of any farming produce of a predetermined quality, in which the sponsor agrees to purchase such farming produce from the farmer and to provide farm services”.

“Now the AIKSCC’s argument is that the third party in this section has been left undefined and they can be any persons/intermediaries.and in such situation we note the role for multiple intermediaries, commercial agents, arhatiyas and village touts who will act as intermediaries now,” said Bharti Kisan Union (BKU) Dakaunda general secretary Jagmohan Singh, while adding that a detailed draft about it has been submitted to the Government of India by AIKSCC in the recently held meetings.

AIKSCC also highlighted another possibility of the role of intermediaries in the Contract Farming Act in the explanation of section 2 (g) (ii), which says that the term ‘farming agreement’ may include ‘production agreement’, where the sponsor agrees to provide farm services, either fully or partially and to bear the risk of output, but agrees to make payment to the farmer for the services rendered by such farmer. But here, AIKSCC points out that the sponsor is to supply farm services which as per Section 2(d) include supply of seed, feed, fodder, agro-chemicals, machinery and technology, advice, non-chemical agro-inputs and such other inputs for farming etc.

“But Section 3 (1) (b) states that the “responsibility for compliance of any legal requirement for providing such farm services shall be with the Sponsor or the farm service provider.” This, AIKSCC says, brings in another participant in the production agreement called the ‘farm service provider’, without defining who this person is. This ‘farm service provider’ may be to provide an escape from ‘responsibility of compliance’ on the sponsor, said AIKSCC in its draft of objection against these Bills.

Furthermore, Section 4 (1) of this Act brings in the concept of mutually acceptable quality, grade and standards of a farming produce to be complied with for the performance of such agreement. Section 4 (3) brings in the concept of determining “quality, grade and standards for pesticide residue, food safety standards, good farming practices and labour and social development standards may also be adopted in the farming agreement”. Section 4 (4) brings in the concept of monitoring and certification of “the process of cultivation or rearing, or at the time of delivery, by third party qualified assayers to ensure impartiality and fairness”.

“This is another type of third party, a qualified assayer. Section 10 provides for “an aggregator or farm service provider may become a party to the farming agreement” and.”aggregator” means any person, including a farmer producer organisation, which acts as an intermediary between a farmer or a group of farmers and a sponsor and provides aggregation related services to both farmers and sponsor.Where is the freedom from the middleman and where is protection of farmers’ interests?’’ asked the AIKSCC.

After the APMC Act was done away with in Bihar, several village level touts, small and big traders are controlling the crop purchase from farmers and then selling in big mandis across India, said farmers’ unions.

“Even the central government has been writing to Punjab for the past around two years to get rid of the arhtiya system to have transparency in payment to farmers, but this undefined ‘third party’ between farmer and sponsor is qualified to act as ‘middle man’,” said Dr Darshan Pal Singh, a member of AIKSCC.

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