WHAT IS FARM LAW NOTIFIED IN GAZETTE
A farmer may enter into a written farming agreement in respect of any farming
produce and such agreement may provide for—
(a) the terms and conditions for supply of such produce, including the time of
supply, quality, grade, standards, price and such other matters; and
(b) the terms related to supply of farm services:
Provided that the responsibility for compliance of any legal requirement for
providing such farm services shall be with the Sponsor or the farm service provider, as
the case may be.
(2) No farming agreement shall be entered into by a farmer under this section in
derogation of any rights of a share cropper.
Explanation.—For the purposes of this sub-section, the term "share cropper" means a
tiller or occupier of a farm land who formally or informally agrees to give fixed share of
crop or to pay fixed amount to the land owner for growing or rearing of farming produce.
(3) The minimum period of the farming agreement shall be for one crop season or one
production cycle of livestock, as the case may be, and the maximum period shall be five
years:
Provided that where the production cycle of any farming produce is longer and may
go beyond five years, in such case, the maximum period of farming agreement may be
mutually decided by the farmer and the Sponsor and explicitly mentioned in the farming
agreement.
(4) For the purposes of facilitating farmers to enter into written farming agreements,
the Central Government may issue necessary guidelines along with model farming agreements,
in such manner, as it deems fit.
4 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—
4. (1) The parties entering into a farming agreement may identify
) The parties entering into a farming agreement may identify and require as a
condition for the performance of such agreement compliance with mutually acceptable quality,
grade and standards of a farming produce.
(2) For the purposes of sub-section (1), the parties may adopt the quality, grade and
standards—
(a) which are compatible with agronomic practices, agro-climate and such other
factors; or
(b) formulated by any agency of the Central Government or the State Government,
or any agency authorised by such Government for this purpose,
and explicitly mention such quality, grade and standards in the farming agreement.
(3) The quality, grade and standards for pesticide residue, food safety standards,
good farming practices and labour and social development standards may also be adopted in
the farming agreement.
(4) The parties entering into a farming agreement may require as a condition that such
mutually acceptable quality, grade and standards shall be monitored and certified during the
process of cultivation or rearing, or at the time of delivery, by third party qualified assayers
to ensure impartiality and fairness.
5. The price to be paid for the purchase of a farming produce may be determined and
mentioned in the farming agreement itself, and in case, such price is subject to variation,
then, such agreement shall explicitly provide for—
(a) a guaranteed price to be paid for such produce;
(b) a clear price reference for any additional amount over and above the
guaranteed price, including bonus or premium, to ensure best value to the farmer and
such price reference may be linked to the prevailing prices in specified APMC yard or
electronic trading and transaction platform or any other suitable benchmark prices:
Provided that the method of determining such price or guaranteed price or
additional amount shall be annexed to the farming agreement.
6. (1) Where, under a farming agreement, the delivery of any farming produce is to
be—
(a) taken by the Sponsor at the farm gate, he shall take such delivery within the
agreed time;
(b) effected by the farmer, it shall be the responsibility of the Sponsor to ensure
that all preparations for the timely acceptance of such delivery have been made.
(2) The Sponsor may, before accepting the delivery of any farming produce, inspect
the quality or any other feature of such produce as specified in the farming agreement,
otherwise, he shall be deemed to have inspected the produce and shall have no right to
retract from acceptance of such produce at the time of its delivery or thereafter.
(3) The Sponsor shall,—
(a) where the farming agreement relates to seed production, make payment of
not less than two-third of agreed amount at the time of delivery and the remaining
amount after due certification, but not later than thirty days of delivery;
(b) in other cases, make payment of agreed amount at the time of accepting the
delivery of farming produce and issue a receipt slip with details of the sale proceeds.
(4) The State Government may prescribe the mode and manner in which payment shall
be made to the farmer under sub-section.Where a farming agreement has been entered into in respect of any farming
produce under this Act, such produce shall be exempt from the application of any State Act,
by whatever name called, established for the purpose of regulation of sale and purchase of
such farming produce.
(2) Notwithstanding anything contained in the Essential Commodities Act, 1955 or in
any control order issued thereunder or in any other law for the time being in force, any
obligation related to stock limit shall not be applicable to such quantities of farming produce
as are purchased under a farming agreement entered into in accordance with the provisions
of this Act.
8. No farming agreement shall be entered into for the purpose of—
(a) any transfer, including sale, lease and mortgage of the land or premises of
the farmer; or
(b) raising any permanent structure or making any modification on the land or
premises of the farmer, unless the Sponsor agrees to remove such structure or to restore
the land to its original condition, at his cost, on the conclusion of the agreement or
expiry of the agreement period, as the case may be:
Provided that where such structure is not removed as agreed by the Sponsor, the
ownership of such structure shall vest with the farmer after conclusion of the agreement
or expiry of the agreement period, as the case may be.
9. A farming agreement may be linked with insurance or credit instrument under any
scheme of the Central Government or the State Government or any financial service provider
to ensure risk mitigation and flow of credit to farmer or Sponsor or both.
10. Save as otherwise provided in this Act, an aggregator or farm service provider may
become a party to the farming agreement and in such case, the role and services of such
aggregator or farm service provider shall be explicitly mentioned in such farming agreement.
Explanation.—For the purposes of this section,—
(i) "aggregator" means any person, including a Farmer Producer Organisation,
who acts as an intermediary between a farmer or a group of farmers and a Sponsor and
provides aggregation related services to both farmers and Sponsor;
(ii) "farm service provider" means any person who provides farm services.
11. At any time after entering into a farming agreement, the parties to such agreement
may, with mutual consent, alter or terminate such agreement for any reasonable cause.
12. (1) A State Government may notify a Registration Authority to provide for electronic
registry for that State that provides facilitative framework for registration of farming
agreements.
(2) The constitution, composition, powers and functions of the Registration Authority
and the procedure for registration shall be such as may be prescribed by the State Government.
DISPUTE SETTLEMENT IN THE FARM LAW
A dispute arising from any farming agreement shall be first referred to the conciliation
board formed as per the provisions of the farming agreement and every endeavour shall be
made by such board to bring about settlement of such dispute.
(3) Where, in respect of any dispute, a settlement is arrived during the course of
conciliation proceeding, a memorandum of settlement shall be drawn accordingly and signed
by the parties to such dispute and such settlement shall be binding on the parties.
14. (1) Where, the farming agreement does not provide for conciliation process as
required under sub-section (1) of section 13, or the parties to the farming agreement fail to
settle their dispute under that section within a period of thirty days, then, any such party may
approach the concerned Sub-Divisional Magistrate who shall be the Sub-Divisional Authority
for deciding the disputes under farming agreements.
(2) On receipt of a dispute under sub-section (1), the Sub-Divisional Authority may,
if—
(a) the farming agreement did not provide for conciliation process, constitute a
conciliation board for bringing about settlement of such dispute; or
(b) the parties failed to settle their dispute through conciliation process, decide
the dispute in a summary manner within thirty days from the date of receipt of such
dispute, after giving the parties a reasonable opportunity of being heard and pass an
order for recovery of the amount under dispute, with such penalty and interest, as it
deems fit, subject to the following conditions, namely:—
(i) where the Sponsor fails to make payment of the amount due to the
farmer, such penalty may extend to one and half times the amount due;
(ii) where the order is against the farmer for recovery of the amount due to
the Sponsor on account of any advance payment or cost of inputs, as per terms
of farming agreement, such amount shall not exceed the actual cost incurred by
the Sponsor;
(iii) where the farming agreement in dispute is in contravention of the
provisions of this Act, or default by the farmer is due to force majeure, then, no
order for recovery of amount shall be passed against the farmer.
(3) Every order passed by the Sub-Divisional Authority under this section shall have
same force as a decree of a civil court and be enforceable in the same manner as that of a
decree under the Code of Civil Procedure, 1908, unless an appeal is preferred under
sub-section (4).
(4) Any party aggrieved by the order of the Sub-Divisional Authority may prefer an
appeal to the Appellate Authority, which shall be presided over by the Collector or Additional
Collector nominated by the Collector, within thirty days from the date of such order.
(5) The Appellate Authority shall dispose of the appeal within thirty days.
(6) Every order passed by the Appellant Authority under this section shall have same
force as a decree of a civil court and be enforceable in the same manner as that of a decree
under the Code of Civil Procedure, 1908.
(7) The amount payable under any order passed by the Sub-Divisional Authority or
the Appellant Authority, as the case may be, may be recovered as arrears of land revenue.
(8) The Sub-Divisional Authority or the Appellate Authority shall, while deciding
disputes under this section, have all the powers of a civil court for the purposes of taking
evidence on oath, enforcing the attendance of witnesses, compelling the discovery and
production of documents and material objects and for such other purposes as may be
prescribed by the Central Government.
