Farm laws: Centre to take states route

'As far as contract farming is concerned, we already have a model Act and states will be encouraged to adopt them.'

After the repeal of the three controversial agriculture Acts, officials said the focus would shift to convincing states to adopt model APMC laws that were promulgated some years back, and if possible link their adoption to some sort of fiscal benefit as suggested by the 15th Finance Commission in its draft report.

"As far as contract farming is concerned, we already have a model Act and states will be encouraged to adopt them. In the case of the trade Act, already there is the Electronic National Agriculture Market (e-NaM) platform that provides the option of selling and purchasing directly. Regarding the Essential Commodities Act, the situation as prevailed earlier would be restored," a senior official said.

The Centre a few years ago had circulated two model Acts on reforming APMCs and also contract farming, which has been adopted by some states.

These were called the model Agricultural Produce Marketing (Regulation) Act-2017 and the Agriculture Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2018.

The Finance Commission had suggested linking part of its performance-based grants to states that adopt these model laws, along with the one on land leasing.

The Centre, too, had made repeated attempts to encourage states to reform their agriculture marketing laws with varying degrees of success.

Studies suggest that even before the three central Acts were brought to allow contract farming, regulate trade outside the mandis, and amend the Essential Commodities Act (EC Act) in June 2018, as many as 23 states had permitted direct purchase from farmers, 21 allowed e-trading, 23 had single-point levy of market fee, and 22 issued single trading licence for the entire state.

That apart, 22 states and Union Territories had allowed private wholesale markets, 20 permitted contract farming, and 15 even freed fruits and vegetables from the APMC regulation altogether.

"Clearly, even before the current set of central laws came into force, states were doing agriculture reforms which and they will continue," said Professor Sukhpal Singh, chairperson for Centre for Management in Agriculture in IIM-Ahmedabad.

Interestingly, the modifications suggested by the central government during the course of its 11-round of negotiations with agitating farmers on the Acts was to give the state's power to regulate trade outside the mandis.

But P K Joshi, former director South-Asia, International Food Policy Research Institute and one who has been part of the three-member committee set up by the Supreme Court to study the three Acts and suggest a way forward, said big-ticket agriculture investments will get affected because of the decision to repeal the Acts.

"I feel investments in the sector, be it domestic or foreign, will get impacted," Joshi told Business Standard "and we all know that farming needs big-ticket investments to boost productivity and also exports."

• MODI'S FARM LAWS