Contract Farming Gains Traction in India

Fifteen Indian states and Union Territories have permitted contract farming, according to a statement in Parliament. Contract farming involves an institutional arrangement for agreements and indemnity to farmers' land, with dispute resolution mechanisms specified. The topic is closely related to agriculture marketing as a state subject.

In a recent parliamentary session, it was disclosed that about 15 states and Union Territories in India have sanctioned the practice of contract farming.

The Union Minister of State for Agriculture, Ramnath Thakur, highlighted that agriculture marketing remains a state subject, and these regions have incorporated provisions for contract farming in their Agricultural Produce Market Committee (APMC) Acts.

Contract farming facilitates an institutional framework for registering sponsoring companies, documenting agreements, and providing indemnity for farmers’ lands. The mechanism includes arbitration and dispute resolution to address any arising issues.