Page 27 - Putting Farmers First

MYTH AND REALITY

The Farmers (Empowerment and Protection)
Agreement on Price Assurance and Farm Services
Act 2020 – Contract Farming Law

S. No MYTH REALITY

1 Contractors Agreement is for crops and not for land
will take over The law clearly disallows any transfer,
farmers’ land and including sale, lease and mortgage of the
farmers will end land or premises of the farmer
up becoming
laborers The law ensures that buyers/sponsors are
prohibited from acquiring ownership rights
or making permanent modifications on
farmers’ land

2 No legal Clear pro-farmer dispute resolution
safety net for mechanism outlined. Some farmers have
farmers against already got due compensation by taking
contractors legal action against traders
Contractors can No recovery of dues against farmers’
take over farmer land. Farmers’ land is safe, no matter
land for recovery what the situation
3 The Act does not The law clearly says that the price of
provide any price farming produce will be mentioned in
guarantee for the farming agreement itself, which
farmers assures the price
It also says that, in case, such price is
subject to variation, then, the agreement
shall explicitly provide for a guaranteed
price to be paid for such produce
If the contractor fails to honour the
agreement and does not make payment to
the farmer, penalty may extend to one and
half times the amount due
Some farmers have already benefited from
this
4 Big companies The contract agreement will guarantee the
will exploit farmers to get the fixed price
farmers in the
name of contract Farmer can withdraw from the contract at
any point without any penalty
5 Such agreement- Punjab, Tamil Nadu and Odisha already
based farming have contract farming laws.
has never been
tried in India

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