Economics

Choose the Correct Answer

Correct Answer : Option a

Explanation
Option a is correct: Many states in India have introduced their own contract farming regulations or adopted the Model Contract Farming Act, 2018, which aims to create a legal framework ensuring fair agreements between farmers and buyers. The involvement of state laws helps tailor contract farming policies to local agricultural conditions.

Option b is not correct: The Model Contract Farming Act, 2018, specifies that disputes should primarily be handled outside of the civil court system, through dispute settlement authorities, local committees, or designated officers to ensure faster and farmer-friendly resolution. Farmers and buyers can seek mediation or arbitration instead of lengthy legal proceedings.

Option c is not correct: While contract farming provides market assurance, small and marginal farmers often face challenges such as lack of bargaining power, dependency on large agribusinesses, and stringent contract terms that favor buyers. Additionally, initial investment requirements may prevent their widespread participation. Larger farmers or producer groups tend to benefit more due to better infrastructure and financial backing.

Option d is not correct: Contract farming agreements do not require farmers to lease their land to companies. Instead, farmers enter into production agreements where they cultivate crops as per the agreed specifications. The ownership and control of land remain with the farmers, ensuring that contract farming does not threaten land rights.