Yogi government to bank on contract farming to double farmers’ income

By Hindustan Times on 29 Aug 2017 | read

Contract farming is back on the state government’s agenda after previous regimes preferred to sweep the matter under the carpet in view of its potential to spark a controversy.

Now, the Yogi Adityanath government is all set to adopt contract farming as one of the most important tools of its multipronged strategy to enhance farmers’ income in Uttar Pradesh.

Under contract farming, farmers grow crops as part of an agreement with private companies that purchase their produce on the basis of mutually agreed terms and conditions.

This arrangement is said to promise an assured market and good price to farmers and relatively low-price goods to consumers.

Agricultural production commissioner RP Singh told HT: “We are working on different fronts to enhance farmers’ income in the state.”

“Contract farming is an important item on our agenda for this purpose,” he said.

The government was going to make sweeping changes in its Agricultural Produce Marketing Commodities (APMC) Act to pave the way for introduction of contract farming, entry of private players, opening of private mandis, beginning of e-trading, among other things all aimed at increasing farmers’ income, he said.

He said expert bodies like the Giri Institute of Development Studies had also been roped in to suggest ways to enhance farm household income.

The state government’s move is a corollary to the Centre’s announcement to double farmers’ income in the country by 2022-23. The Centre has already asked the states to amend their APMC Acts on the lines of the Model Act sent to them to facilitate marketing reforms, including contract farming, in the agriculture sector, giving special treatment to fruits and vegetables.

Uttar Pradesh is among the states where farmers’ income is quite low. As per the national sample survey office (NSSO) data quoted by the Niti Aayog in one of its recent policy papers, 23.2% of the total farm households in UP had income even below the poverty line in 2011-12. This was the fifth lowest after Jharkhand, Odisha, Bihar and Madhya Pradesh and only a little above the national average of 22.5%.

The Akhilesh Yadav government too tried to introduce contract farming, albeit under a new name, ‘agreement farming’ after a group of ministers recommended the same and also made some amendments to the APMC Act under the Centre’s pressure but left the idea midway for fear of a controversy.

Besides, the Mulayam Singh Yadav government had in 2005 sought to introduce contract farming in UP but had to drop the idea after a lot of criticism by political parties and others who claimed that the move will harm farmers’ interests in the long run to the extent that they may might have to lose their land to private companies.

Singh, however, said there were unnecessary misconceptions about contract farming. “We will educate farmers and dispel their apprehensions, if any,” he said.

Sources said the government, while opening the gates to contract farming in the state, will ensure through a legal framework that private companies entering into a contract with farmers are not able to get the cultivator’s land transferred to their (companies) for any reason.