Deccan Herald | 1 December 2011
In a major policy move to make farmers partners in agro-based ventures, the State government on Thursday announced that it would amend relevant laws to enable farmers to use their land as equity in farming collaborations with private companies.
The initiative, said to be the first of its kind in the country, comes at a time when there is growing apprehension among the farming community that the State government’s policies were tilted towards snatching away their land in the name of modernising agriculture.
The State’s new business model in the agriculture sector termed “management contract” was announced by Chief Minister D V Sadananda Gowda on day one of the State’s maiden investment meet exclusively for agro and allied sector, ‘Global Agribusiness and Food Processing Summit -2011,’ being held here on Thursday.
As per the new model, if a farmer owns 10 acres of land worth say Rs one crore and is willing to enter into an agro venture with a private company, then the market value of the land would be considered as the farmer’s equity in the project. The cultivation of the farm produce will have to be taken up by the private players.
“The agro company will have to enter into an agreement with the farmer for a specified period. The farmer by virtue of being a partner in the venture will get a share in the profit. Besides, the farmer will retain the ownership of land through the agreement period and is also entitled for fixed rent for the land holding”, explains Agriculture Secretary Sandeep Dave.
Certain sections of the Karnataka land Revenue Act -1961 will have to be amended to bring the new initiative into effect, Dave said. Management contract is different from contract farming, for in the latter case the farmer will have to cultivate the land to provide established quantities of a specific agricultural product while meeting the quality standards and delivery schedule set by the purchaser, usually an agro company.
In case of management contract, the onus of cultivation and harvest rests with the private player, who will be free to use technology to increase yield. Companies can also go for multiple contracts with farmers owning land on adjacent plots to extend their cultivation area.
Sadananda Gowda showcased the new initiative as a win-win situation for farmers. “I can assure you that there will be no forcible acquisition of land. We are also ensuring that only serious players are invited and not speculators and real estate players,” he said. It remains to be seen how the agro industry will react to management contract.
In a major policy move to make farmers partners in agro-based ventures, the State government on Thursday announced that it would amend relevant laws to enable farmers to use their land as equity in farming collaborations with private companies.
The initiative, said to be the first of its kind in the country, comes at a time when there is growing apprehension among the farming community that the State government’s policies were tilted towards snatching away their land in the name of modernising agriculture.
The State’s new business model in the agriculture sector termed “management contract” was announced by Chief Minister D V Sadananda Gowda on day one of the State’s maiden investment meet exclusively for agro and allied sector, ‘Global Agribusiness and Food Processing Summit -2011,’ being held here on Thursday.
As per the new model, if a farmer owns 10 acres of land worth say Rs one crore and is willing to enter into an agro venture with a private company, then the market value of the land would be considered as the farmer’s equity in the project. The cultivation of the farm produce will have to be taken up by the private players.
“The agro company will have to enter into an agreement with the farmer for a specified period. The farmer by virtue of being a partner in the venture will get a share in the profit. Besides, the farmer will retain the ownership of land through the agreement period and is also entitled for fixed rent for the land holding”, explains Agriculture Secretary Sandeep Dave.
Certain sections of the Karnataka land Revenue Act -1961 will have to be amended to bring the new initiative into effect, Dave said. Management contract is different from contract farming, for in the latter case the farmer will have to cultivate the land to provide established quantities of a specific agricultural product while meeting the quality standards and delivery schedule set by the purchaser, usually an agro company.
In case of management contract, the onus of cultivation and harvest rests with the private player, who will be free to use technology to increase yield. Companies can also go for multiple contracts with farmers owning land on adjacent plots to extend their cultivation area.
Sadananda Gowda showcased the new initiative as a win-win situation for farmers. “I can assure you that there will be no forcible acquisition of land. We are also ensuring that only serious players are invited and not speculators and real estate players,” he said. It remains to be seen how the agro industry will react to management contract.
