Government formulating contract farming policy, says Pawar

05 May 2007

Mumbai: The government is working on a contract farming policy to ensure that land belonging to peasants is not leased out or sold to private sector companies, union agriculture minister Sharad Pawar told a workshop on contract farming.

"The contract farming model which we want to implement in India will ensure that land will be permanently owned and cultivated only by the farmers. We are not encouraging a model of leasing land and allowing private sector to acquire it for cultivation," Pawar told the workshop on ''Contract Farming: Methods and Experiences'' being held as part of the Indo-US Knowledge Initiative on Agriculture.

Pawar said the government has taken a number of steps for creating an enabling environment for investment in agribusiness. Policy and regulatory measures have been taken for strengthening forward and backward linkages and reforms in the marketing sector have been given high priority.

Pointing to the government''s continued support to the agribusiness sector, he said, following the centre''s initiative, a majority of states have already amended their APMC Acts to allow direct transaction between buyers and sellers outside the regulated agricultural markets. Financial institutions have been permitted to fund contract farming schemes. Taxes on processed foods have been reduced. A number of agricultural export promotion zones have been established. FDI is allowed in food processing and single brand retailing, the minister said.

Such platforms would suggest ways of going about the policy and if necessary provide the inputs for any new legislation, Pawar said, adding that some institutional mechanism is needed to protect the interests of both the contracting arties.

Pawar said such workshops will provide an idea on the way one should formulate the policy and then "if required what way we should prepare a new legislation for the purpose. We are in that process".