Tamil Nadu, First State in India to Enact Law on Contract Farming

Tamil Nadu has become the first State in India to enact a law on 'Contract Farming' with President Ram Nath Kovind giving consent to the Agricultural Produce & Livestock Contract Farming and Services (Promotion and Facilitation) Act.

Tamil Nadu government in an official release on 29th October 2019 said that the law will protect the interests of farmers during bumper crop or when the market prices changes. They will be paid a pre-determined price that had been set at the time of signing agreements with buyers.

Also, such agreements will have to be registered with the designated officials from the Department of Agricultural Marketing & Agri Business.

A 6-member body, named the Tamil Nadu State Contract Farming & Services (Promotion & Facilitation) Authority, will be made to ensure proper implementation of the Act and make recommendation to the State government for promotion as well as better performance of contract farming.

Growers could also get support from buyers for improving productivity by way of inputs, feed & fodder and technology. In addition, farmers involved in rearing of livestock for scale of economy in production & post-production activities will be covered under this. The latitude of the contracts could include 'holistically from pre-production to post-production.'

The release further said that any produce, which is banned by the Central or the State government or the Indian Council of Agricultural Research (ICAR), will not be covered under contract farming. Edappadi K. Palaniswami, Tamil Nadu Chief Minister had given instructions to officers to complete finalization of rules & ensure early execution of the law.

It is important to mention that the formulation of the Act is based on a model law prepared by Centre, which consulted different stakeholders, including the State governments. The Tamil Nadu government in its budget for 2018-19 had announced that it will come out with one such law.