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.
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.
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.
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.
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.
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".
Indo-US Knowledge Initiative on Agriculture was announced in July 2005 during
the visit of Indian prime minister to the US. The workshop is being held to share
experiences of experts and farmers of the two countries in contract farming.
minister emphasised that demand for high-value and processed food products is
rising and will continue to rise because of the booming economy, rising incomes,
growing urbanisation and changing consumer preferences. In addition, globalisation
offers an opportunity to access the world market. He expressed happiness that
realising the enormous untapped opportunities in the Indian agribusiness sector,
a number of business houses locally and from abroad have started entering it.
cautioned against the exclusion of small farmers and the likely adverse impact
of contract farming on food security.
government''s main concern is how benefits of emerging opportunities reach the
producers, especially the smallholders, he said. Since the small farmers face
problems relating to credit, technology, inputs and market access, Pawar suggested
that agribusiness firms should integrate farmers in their supply chains through
institutions such as cooperatives, producers'' associations and contract farming.
encouraging farmers to form grass-root level associations/informal cooperatives
owned and managed by farmers themselves and/or producer companies," he said.
of some successful models indicate that contract farming,
if well managed, benefits the farmers in terms of assured market, reduced marketing
and transportation costs, access to improved technology and quality inputs, and
sharing of production and price risks, Pawar said and asked participants of the
workshop to come out with models relevant to Indian conditions.