No farmer can enter into an agricultural agreement “deviating from the rights of a partial tenant”. The parties to an agricultural agreement may, by mutual agreement, amend or terminate the agreement for any “reasonable” reason. The Act provided for a three-stage dispute settlement mechanism by the conciliation body, the subdivision judge and the appellate authority. The agreement was to provide for a conciliation body and a conciliation procedure for the settlement of disputes.  The law has been widely criticized by farmers across the country, particularly in Punjab and Haryana. Without any regulation, the interests of farmers will be neglected.   Quality, quality and standards relating to pesticide residues, food safety, “good agricultural practices” and “labour and social development” may also be included in the agreement. The Parties may require that such mutually acceptable qualities, qualities and standards be checked and certified by third parties during the cultivation or rearing process or at the time of delivery. On September 14, 2020, three bills “aimed at transforming agriculture in the country and increasing farmers` incomes” were introduced in the Lok Sabha – the Farmers` Agricultural Price Insurance and Services Agreement (Empowerment and Protection) Bill, 2020; the Agricultural Trade and Commerce (Promotion and Facilitation) Bill 2020; and the Essential Products Amendment Bill, 2020. The minimum duration of these agreements shall be one growing season or one production cycle of the animals and the maximum duration shall be five years. Where the production cycle of an agricultural product may exceed five years, the maximum period may be determined by mutual agreement between the farmer and the sponsor and expressly specified in the agreement. The central government may issue guidelines as well as model agricultural agreements if it deems it appropriate. Agricultural agreements may include the conditions of supply of agricultural products – including delivery time, quality, quality, standards and price of products – and agricultural services.
Where breeding agreements concern seed production, the sponsor shall pay the farmer at least two-thirds of the agreed amount at the time of delivery and the balance “after appropriate certification”, but no later than 30 days after delivery. In other cases, promoters may pay the agreed amount at the time of acceptance of delivery of agricultural products and issue a receipt with the details of the sale. The state government may prescribe how payments to farmers are to be made. Except as otherwise provided in this Act, a supplier of agricultural services may become a party to the Agricultural Agreement. In this case, the role and services of the provider are expressly mentioned in the contract. What are the provisions of the Farmers Payments Act? Agricultural products mentioned in agreements under this Act are exempt from the application of all state laws regulating the sale or purchase of agricultural products. Notwithstanding the provisions of the Essential Products Act 1955 or any ordinance in force at that time, such products are exempt from “any obligation relating to the limitation of storage”. Agricultural markets in India are mainly regulated by the state laws of the Agricultural Products Marketing Committee (APMC). The APMCs were created with the aim of ensuring fair trade between buyers and sellers for efficient pricing of farmers` products.  CMAs may: (i) regulate trade in agricultural products by licensing buyers, commissionaires and private markets, (ii) collect market fees or other fees for such trade, and (iii) provide the necessary infrastructure in their markets to facilitate trade. The Trade and Commerce Regulations provide buyers with the freedom to purchase agricultural products outside of CMPA markets without having a licence or paying fees to the CMPA. The Contract Cultivation Ordinance provides buyers and farmers with a framework for concluding a contract (before the start of a harvest season) that guarantees farmers a minimum price and buyers a secure supply.
The third regulation amends the Basic Materials Act so that stock limits for agricultural products can only be imposed in the event of a sharp increase in retail prices and exempts participants and exporters in the value chain from any stock limits. All three regulations aim to increase buyers` availability for farmers` products by allowing them to act freely without licensing or stock restrictions, so that increased competition between them leads to better prices for farmers.  Although the regulations are intended to liberalize trade and increase the number of buyers, this may not be enough to attract more buyers. There have been nationwide protests by farmers – particularly in Haryana, Punjab and western Uttar Pradesh – against the three bills that the government says will open up the agricultural sector to private investors and global markets. .