After Presidents Nod, Tamil Nadu Gets Law on Contract Farming

Tamil Nadu becomes the first state to pass a bill on contract farming in the country. Tamil Nadu Assembly passed the Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act in February 2019. The recent President’s approval enabled the gazetting of the bill.

The Law

The Act entitles the producer and the food processing agencies to enter into a contract farming agreement. It specifies the terms and conditions of supply and purchase, enforceable by law. This agreement will include the price, quantity required and the quality grade of the produce. The contract will be registered with the agricultural marketing official of the region. The law covers not only the crops but also animal produce, horticulture, sericulture, and other forest activities. Besides, it ensures that no prohibited crop is grown in the region.

This will protect farmers from the deception of the food processing companies that bought the products from the open market despite giving verbal assurance to the farmers. In addition, Written agreement can be enforceable by law instead of verbal agreement.

Supervising Authorities

The act mandates the set up of Contract Farming and Services Authority that will ensure its implementation. This body will consist of a Chairman and ten experts from the agriculture field. For solving disputes, there is provision for establishing the dispute settlement committee, including the Revenue officer of the subdivision as chairman and other three members, representing farmers and processing industries.


The farmers will get a fair price for the produce and will not have fear of any unsold harvests. The Companies will provide input to nurture the crop till harvest. Around 118 crops have already been listed. R Pannirselvam, managing director of CDAPCL said that the contract farming will prove a win-win situation given that there is no breaching on both sides.

On the contrary, V.Jeevakumar of All India Kisan Sabha (AIKS) believes that the contract will deprive farmers of government assistance and force them to toil under the companies.

To make the law beneficial for both parties, farmers and the companies must understand the terms of the contract and comply with it. There have been many successful contract farming cases in India and hopefully farmers benefit from this law.

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