The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020

Farming agreement:

  • The Ordinance provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce. 
  • The minimum period of an agreement will be one crop season, or one production cycle of livestock. 
  • The maximum period is five years, unless the production cycle is more than five years.

Pricing of farming produce:

  • The price of farming produce should be mentioned in the agreement.
  • For prices subjected to variation, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price must be specified in the agreement.
  • Further, the process of price determination must be mentioned in the agreement.

Dispute Settlement:

  • A farming agreement must provide for a conciliation board as well as a conciliation process for settlement of disputes.
  • The Board should have a fair and balanced representation of parties to the agreement.
  • At first, all disputes must be referred to the board for resolution.
  • If the dispute remains unresolved by the Board after thirty days, parties may approach the Sub-divisional Magistrate for resolution.
  • Parties will have a right to appeal to an Appellate Authority (presided by collector or additional collector) against decisions of the Magistrate. 
  • Both the Magistrate and Appellate Authority will be required to dispose of a dispute within thirty days from the receipt of application.
  • The Magistrate or the Appellate Authority may impose certain penalties on the party contravening the agreement.
  • However, no action can be taken against the agricultural land of farmer for recovery of any dues.

The Essential Commodities (Amendment) Ordinance, 2020

Regulation of food items:

  • The Essential Commodities Act, 1955 empowers the central government to designate certain commodities (such as food items, fertilizers, and petroleum products) as essential commodities. 
  • The central government may regulate or prohibit the production, supply, distribution, trade, and commerce of such essential commodities. 
  • The Ordinance provides that the central government may regulate the supply of certain food items including cereals, pulses, potatoes, onions, edible oilseeds, and oils, only under extraordinary circumstances.  
  • These include: (i) war, (ii) famine, (iii) extraordinary price rise and (iv) natural calamity of grave nature.

Stock limit:

  • The Ordinance requires that imposition of any stock limit on agricultural produce must be based on price rise.
  • A stock limit may be imposed only if there is: (i) a 100% increase in retail price of horticultural produce; and (ii) a 50% increase in the retail price of non-perishable agricultural food items.  
  • The increase will be calculated over the price prevailing immediately preceding twelve months, or the average retail price of the last five years, whichever is lower.

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