Key Features The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020

 

• Trade of farmers’ produce: The Ordinance allows intra-state and inter-state trade of farmers’ produce outside: (i) the physical premises of market yards run by market committees formed under the state APMC Acts and (ii) other markets notified under the state APMC Acts.  Such trade can be conducted in an ‘outside trade area’, i.e., any place of production, collection, and aggregation of farmers’ produce including: (i) farm gates, (ii) factory premises, (iii) warehouses, (iv) silos, and (v) cold storages.

• Electronic trading: The Ordinance permits the electronic trading of scheduled farmers’ produce (agricultural produce regulated under any state APMC Act) in the specified trade area.  An electronic trading and transaction platform may be set up to facilitate the direct and online buying and selling of such produce through electronic devices and internet.  The following entities may establish and operate such platforms: (i) companies, partnership firms, or registered societies, having permanent account number under the Income Tax Act, 1961 or any other document notified by the central government, and (ii) a farmer producer organization or agricultural cooperative society.

• Market fee abolished: The Ordinance prohibits state governments from levying any market fee, cess, or levy on farmers, traders, and electronic trading platforms for the trade of farmers’ produce conducted in an ‘outside trade area’.

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 produces: 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 the 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 the 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 the 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.