Centre notifies two Ordinances for free trade in farm produce

New Delhi: The government has notified two Ordinances which seek to provide barrier-free trade for farmers’ produce outside the notified farm mandis, and empowers farmers to enter into farming agreements with private players prior to production for sale of agri-produce.

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance were promulgated on June 5, 2020.

However, the Union Agriculture Ministry notified the two Ordinances on July 20.

According to the notification, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance allows intra-state and inter-state trade of farmers’ produce outside the government notified mandis.

Farmers are allowed to trade at any place of production, aggregation and collection centres of farmers’ produce, including farm gates, factory premises, warehouses, silos and cold storages.

The Ordinance also permits electronic trading of farmers’ produce in the specified trade area. Private players, farmer producer organisations or agricultural cooperative society can establish and operate such platforms.

A person operating the platform will be subject to a penalty between Rs 50,000 and Rs 10 lakh for non-compliance with e-trading provisions. In the case of continuous contravention, a further penalty of up to Rs 10,000 per day may be imposed.

On payment, the Ordinance clearly states that a person transacting with a farmer will be required to make payments to the farmer on the same day, or within three working days in certain conditions, for any transaction of scheduled farmers” produce.

The Ordinance, however, prohibits State governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms.

It also specifies dispute resolution mechanisms where the parties involved in a trade-related dispute may apply to the Sub-Divisional Magistrate for relief through conciliation.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance provide for farming agreements with private players before production for sale of agri-produce at a pre-determined price, quality and period of delivery.

The Ordinance also provides a framework for protection and empowerment of farmers with reference to the sale and purchase of farm products.