Passed by the Lok Sabha on September 17, 2020.

Passed by the Rajya Sabha on September 20, 2020.

Received Presidential Assent on September 24, 2020

MAIN PROVISIONS

The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field. Price assurance to farmers even before sowing of crops. In case of higher market price, farmers will be entitled to this price over and above the minimum price. It will transfer the risk of market unpredictability from the farmer to the sponsor. Due to prior price determination, farmers will be shielded from the rise and fall of market prices. It will also enable the farmer to access modern technology, better seed and other inputs. It will reduce the cost of marketing and improve income of farmers. Effective dispute resolution mechanism has been provided for with clear timelines for redressal. It will given an impetus to research and new technology in agriculture sector.

DOUBT

Under contract farming, farmers will be under pressure and they will not be able to determine prices

REALITY

The farmer will have full power in the contract to fix a sale price of his choice for the produce. They will receive payment within a maximum of 3 days.

DOUBT

How will small farmers be able to practice contract farming, sponsors will shy away from them

REALITY

10,000 Farmer Producer Organizations (FPOs) are being formed throughout the country. These FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce

DOUBT

The new system will be a problem for farmers.

REALITY

After signing a contract, farmers will not have to seek out traders. The purchasing consumer will pick up the produce directly from the farm.

DOUBT

In case of a dispute, big companies will be at an advantage.

REALITY

In case of dispute, there will be no need to go to court repeatedly. There will be a local dispute redressal mechanism.