{"id":236364,"date":"2020-09-28T11:29:14","date_gmt":"2020-09-28T05:59:14","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=236364"},"modified":"2021-07-30T09:38:26","modified_gmt":"2021-07-30T04:08:26","slug":"farmers-empowerment-and-protection-agreement-on-price-assurance-and-farm-services-act-2020-will-farming-agreement-help-in-eliminating-intermediaries-decoded","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2020\/09\/28\/farmers-empowerment-and-protection-agreement-on-price-assurance-and-farm-services-act-2020-will-farming-agreement-help-in-eliminating-intermediaries-decoded\/","title":{"rendered":"Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 | Will farming agreement help in eliminating intermediaries? Decoded"},"content":{"rendered":"

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 received Presidential Assent on 24-09-2020.<\/span><\/p>\n

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020<\/span><\/strong><\/p>\n

What is the purpose of this Act?<\/span><\/h4>\n

This Act will provide a national framework for the farming agreements that protect and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner.<\/p>\n

Key Features:<\/span><\/h3>\n

Farming Agreement [SECTION 3]<\/span><\/p>\n

A farmer may enter into a farming agreement, which may provide for the following:<\/p>\n

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(a) the terms and conditions for supply of such produce, including the time of supply, quality, grade, standards, price and such other matters; and<\/p>\n

(b) the terms related to supply of farm services<\/p>\n

Farmers can’t enter into a farming agreement in derogation of any rights of a share cropper.<\/p>\n

The minimum period of the agreement<\/strong>: one crop season or one production cycle of livestock<\/span><\/p>\n

Maximum period of the agreement:<\/strong> 5 years<\/p>\n

To facilitate such agreement, the government may issue guidelines with model agreements.<\/p>\n

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Quality, grade and standards of farming produce [Section 4]<\/span><\/p>\n

The terms in regard to Quality, grade and standards of farming produce will be mutually agreed and the said standards or quality, the grade shall be explicitly mentioned in the faring agreement.<\/span><\/p>\n

Pricing Agreement [Section 5]<\/span><\/p>\n

Pricing with regard to the purchase of farming produce shall be mentioned in the agreement.<\/p>\n

In case the above-stated price is subject to variation, the agreement shall explicitly provide for the following:<\/p>\n

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(a) a guaranteed price to be paid for such produce;<\/p>\n

(b) a clear price reference for any additional amount over and above the guaranteed price, including bonus or premium, to ensure the best value to the farmer and such price reference may be linked to the prevailing prices in specified APMC yard or electronic trading and transaction platform or any other suitable benchmark prices<\/p>\n

The method of determining the stated price<\/strong> should be mentioned in the agreement.<\/p>\n

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Sale or purchase of farming produce [SECTION 6]<\/span><\/p>\n

Sponsor should take the delivery of farming produce on the agreed time and delivery date.<\/p>\n

At the time of accepting the farm produce, its the responsibility of the farmer to inspect the same as afterwards, he shall have no right to retract from acceptance of such produce.<\/p>\n

Farming Agreement relating to seed production:<\/strong> Sponsor shall make payment of not less than 2\/3rd of the agreed amount at the delivery time; Remaining amount after due certification but not later than 30 days of delivery.<\/p>\n

Other cases than seed production:\u00a0<\/strong>Payment to be made at the time of accepting the delivery of farming produce and issue a receipt slip<\/p>\n

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Exemptions with respect to farming produce [SECTION 7]<\/span><\/p>\n

Once a farmer enters into a farming agreement, he shall be exempted from the State Act with regard to regulation of sale and purchase of farming produce.<\/p>\n

Essential Commodities Act will also not be applicable, if the farm produce is purchased under the farming agreement.<\/p>\n

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Sponsor prohibited from acquiring ownership rights or making permanent modifications on farmer\u2019s land or premises [SECTION 8]<\/span><\/p>\n

Farming Agreement shall not be entered for the following purpose:<\/p>\n

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