June 21, 2024


Passion For Business

Contract farming guidelines: Farmer liability is limited

Farmers getting into into deal farming settlement with food stuff processors and other companies will have legal responsibility restricted to the progress that they acquire or cost of farm providers offered by the sponsoring business, in accordance to pointers on the new make contact with farming ordinance issued by the Agriculture Ministry.

Also the sponsor beneath no situations can obtain ownership legal rights about the farmers’ land.

The pointers have obviously spelt out that the sponsor would be dependable for any reduction of damage to the farming develop, creation web page, assets and any legal consequence of inputs equipped to farmers. Farmers, on the other hand, are not able to use inputs offered by the sponsor for anything other than escalating the develop which has been agreed on.


These are section of a set of pointers that the Ministry arrived out with for furnishing a legal framework for the Farmers (Empowerment and Protection) Agreement on Selling price Assurance and Farm Providers Ordinance, 2020, which the federal government handed early final thirty day period.

It said the farming settlement need to be for a bare minimum interval of one cropping year or a optimum of 5 a long time. The deal can be outside of 5 a long time only if the one creation cycle of the crop is additional than 5 a long time.

The settlement need to obviously show the mother nature of the farming, measurement of land space, survey variety of the farmer’s discipline, small business deal with of sponsor, title of the village and deal with of the farmer. The farmers getting into into the settlement need to have obvious title of the land. If the settlement is with a farmer producer organisation (FPO), the pointers insist on making sure that the duty for the general performance of the settlement is appropriately assigned amongst the customers of the FPO.

Likewise, if a sharecropper is involved in the settlement, he or she could be created dependable for receiving and using inputs from the sponsor. No clause in the settlement can be in derogation of legal rights of the sharecropper. The obligation to provide the contracted quantities would rest with the farmer.

If the develop is rejected, the causes need to be informed by the sponsor to the farmer and offer you the farmer the opportunity to examine the rejected consignment or have it inspected by a third party. 3rd party could be a licensed assayer, Krishi Vigyan Kendra, seed certifying company, or a qualified agriculture scientist.

As for every the pointers, if the sponsor fails to get shipping and delivery of develop in just the stipulated times described in the settlement, the farmer could promote the develop to a third party and declare from the sponsor the distinction in between the selling price in the settlement and the real selling price that he gained for the develop. Sub-divisional authority can impose penalty up to one hundred fifty for every cent of the declare on the sponsor.

The develop need to be purchased at the selling price offered for in the farming settlement. The sponsor will have no correct to make everlasting transform on the farmer’s discipline. But he can make short term modifications if the farmer agrees and he is obliged to restore the land to its authentic affliction prior to the expiry of the settlement.

The pointers also pressure that the farmer of FPO need to make certain that their ownership of the land is protected and lawfully valid prior to getting into into an settlement. They need to not decide for providing or modifying the ownership of the land when in an settlement with the sponsor.

When disputes occur, the aggrieved party can demand from customers development of conciliation board. If the issue is not settled in 30 times, it can be escalated to the sub-divisional authority and if that also fails an appellate authority, district collector, can listen to the matter and the authority’s conclusion would be remaining, the pointers said.