Contract farming guideline on cards

Ministry of Agriculture Development is introducing — Contract Farming Guideline under the Agricultural Business Promotion Act and Farm Mechanisation Policy — soon to promote sustainable agriculture growth.

The draft policy paper is expected to commercialise agriculture that is at present under labour shortage and has low investment.

The draft will be sent to Cabinet to get its approval.

The draft of Agricultural Business Promotion Act that envisages contract farming will help ensure market access to farmers and to attract private sector in commercial farming, as it also ensures credit facilities.

Apart from making it easier to lease land for agriculture purpose, the guideline states that a buyer can buy the farm produces in advance.

After the implementation of the guideline, it will bind both buyers and producers legally and they can claim reparation, if any of the parities breach the contract.

The existing law fails to address leasehold farming practices as land owners are reluctant to allow others cultivate their land, fearing the leasers might claim permanent tenancy.

Likewise, the farm mechanisation policy aims at providing subsidies on the import of modern farming machinery, including discounts on VAT and other taxes.

The government has allocated Rs 100 million for subsidies to encourage farmers to use farm machines like power tillers, harvesters, planters and seed drills in hill and Tarai regions under the farm mechanisation. But the policy will help give the government more teeth to chew.

The proposed policy is also expected to encourage participation of youth in the farm sector that has seen drop in recent years mainly due to mass exodus for foreign employment as the sector needed high production cost but low return.

Though, according to the National Agriculture Census 2011-12 by the Central Bureau of Statistics, recorded some progress in terms of mechanisation, that was not planned progress. The census claimed, some 22.04 per cent farm households use tractor, while 20.96 per cent use threshers, due to lack of people. In 2001-02, less than 10 per cent used to use threshers and tractors.