Government of India’s Ordinance on Contract Farming

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020, is focused on providing a national framework on farming agreements, opening up access to markets outside normal APMC channels, and directly engage with institutional buyers (agri-business firms, processors, wholesalers, exporters or large retailers, etc.). Farmers need to know what opportunities the ordinance holds out for them. In particular, there is a need to disseminate in simple terms, the following; benefits of the ordinance to farmers, basic steps in contracting, precautions to be exercised, and the best practices in contract farming.

• Benefits of contract farming
• Basic steps – step-by-step description of entering into contracts
• List of dos and don’ts
• Examples from existing successful contract arrangements
• Best practices
• How to get the best out of contract arrangements

Content to be tailored to needs and adult learning style variations of farmers. There would be a mix of visual, aural, and written material so that farmers can get the messages from a mix of audio, visual material in the local language. The content would develop in the following different forms

• Development of short video clips of farmers answering basic doubts, while interacting in the local language (To use farmers that currently produce and market under contracts in different states)
• Cartoons explaining steps in contract farming and contracting
• Creation of infographics, pamphlets, brochures, etc. about the ordinance and its benefits to farmers
• Preparation of Frequently Asked Questions to represent farmer’s queries – can be used by trained extension services personnel for on-ground interaction with farmer groups, FPO management to bring home the message
• Case stories of farmers, groups, and FPOs that successfully adapted to contract farming
  Webinars in regional languages
• Organization of promotion-oriented events/Kisan melas at the district level
• Creation of IEC (Information, Education, and Communication) tools for farmers to understand the policy, regulation, and mechanisms for contract farming

The following means can be used for dissemination

• Use of electronic media, principally social media to reach out to farmers
• Short videos in DD Kisan as also in different DD channels during the agriculturists’ module
• In-village training through farmer organisations – FPOs, Cooperatives, Farmer clubs, SHGs, and their federations
• Outreach activities in melas and fairs

The dissemination can be planned as a year-long ‘Farmer Market Literacy campaign”. The first phase is to reach the appropriate messages through different media and physical outreach that normally happens during cropping and harvest seasons. The second phase, within the next one year, should focus on covering most farmers with market literacy training, using trained facilitators. The funds from the Financial Literacy campaign can be partly used with additional funds being raised from other resources (NABARD can allocate a part of the profits). The campaign can use the following as implementing agencies.

• NABARD DDMs
• Banks with a significant agriculture portfolio
• State Agri marketing departments
• FPO promoting institutions that are supported by NABARD, SFAC, or state governments
• Private sector institutions that offer finance and market linkages to FPOs

In the second phase (within the next twelve months) a physical outreach for increasing awareness and inducing rethinking in farmers on how to market better should be planned.

A simple training course for those who would physically reach out to farmer groups on marketing literacy should be provided. The trained persons can be charged with carrying out a specific number of FML programmes each month continuously for three months. In such a case the coverage can go beyond contract-farming and include other aspects of marketing and maximizing returns to farms. (aspects such as orienting production to specific demands of the market, better sorting, grading and processing, primary value addition before a sale, focus on quality, aggregation for better-negotiating power, pricing and process of aggregation for best effect, linking with financial institutions to improve holding capacity for the timing of sale for maximizing returns, should be covered).