NITI Aayog will come out with a separate Contract Farming Act along the lines of that in Punjab to spur investments in the farm sector in the aid of the government’s initiative to double farmers’ income in five years. The agriculture ministry in consultation with states and country’s think tank NITI Aayog is framing a fresh draft of model APMC Act to roll out the series of reforms to propel farm output for the politically sensitive agriculture sector. This move comes after several states expressed apprehension on certain provision of the exiting act. But all other sources of farm income would continue to be under the APMC Act.

NITI Aayog, after the first national consultation with states on agriculture reforms, informed that they will relook at the model APMC Act and come out with a fresh draft in three months to completely liberalize the sector in a way that it addresses concerns of all states. In order to get better returns in the agriculture sector, entry of private players is necessary to induce competition which would directly benefit the farmer. The original blue print introduced by the NITI Aayog and approved by the Prime Minister’s Office, has proposed  liberal contract farming, direct purchase from farmers by the private players, direct sale by farmers to consumers, single trade licence, single point of levy of taxes and taking fruits and vegetables out of the mandi laws as part of agriculture marketing reforms.

Some states are sceptical on the proposed contract farming provisions while some others have reservations on a single levy laid out in the draft. States like Punjab have voiced their concerns about revenue loss under the existing APMC Act as well. NITI Aayog has taken the views of all states and would rework the provisions of the new model APMC Act accordingly to take all states on board. Moreover the Aayog, as the part of a three-pronged strategy to usher in reforms in agriculture, has also proposed land leasing and forestry reforms as well. Besides liberalizing regulations governing forestry on private land NITI Aayog is pushing states to change their land lease laws in line the central legislation to suit their needs. States have restriction on felling of trees and transporting them without transit permit at present.