Farmer’s Produce Trade And Commerce (Promotion and Facilitation) Bill, 2020

The Farmer’s Produce Trade And Commerce (Promotion and Facilitation) Bill, 2020 is a bill to create an ecosystem for production. The farmers and traders enjoy the sovereignty related to the sale and purchase of a farmer’s output. Through a competitive alternative trading system, a farmer gets profitable prices. So, the Bill promotes efficient and straightforward inter-state and intra-state trade and commerce without any obstacle created by farmers informed under various State Agricultural Legislation. The Bill will provide a profitable stand for electronic trading and the matters connected in multiple aspects.

Farmer’s Produce Trade And Commerce (Promotion and Facilitation) Bill, 2020 at a glance:

1) This Act named The Farmer’s Produce Trade And Commerce (Promotion And Facilitation) Bill, 2020.

2) The “farmers” produce means-

  • Foodstuffs like wheat, rice, pulses, nutritive oil-seeds, oils, vegetables, fruits, nuts, spices, sugarcane and, products of poultry, piggery, goatery, fishery, and dairy intended for human consumption in its natural or processed form;
    • Cattle fodder including oil-cake and other concentrates;
    • Raw cotton, cotton seeds, and raw jute.
  • “Electric trading and transaction platform” means the platform to enable online immediate buying and selling of farmers. As a result farmer, they will physically deliver the product they produced.
  • Farmers means an individual engaged in the production of agricultural products by self or hired labor or any other ways and farmers’ groups or organization.
  • The farmer’s organisation means an organisation or association of a group of farmers, sponsored by the government or any scheme and registered under any law for the duration of time in force.
  • “Inter-State trade” means the Act of buying or selling of agricultural products where a trader or farmer of one State buy or sell products with the traders or farmers of another state.
  • “Intra-State trade” means the Act of buying or selling of agricultural products where a trader or farmer of one State buy or sell products with other traders or farmers of the same State.
  • Notification means a notification published by the Central Government or the State Government in the authorized gazette and the expressions “notify” and “notified” shall be constructed accordingly.
  • “Person” includes-

a) An individual,
b) A partnership firm,
c) A company,
d) A limited liability partnership,
e) A cooperative society
f) A society, or
g) Any association or body of persons duly incorporated or recognized as a group under any ongoing programs of the Central Government or the State Government.

  • “Prescribed” means prescribed by the rules made by the Central Government under this Act.
  • “Scheduled farmers produce” means the agricultural production prescribed under any State APMC Act for regulation.
  • “State” means the Union Territory.
  • “State APMC Act” means any State legislation or Union Territory Legislation in force in India which regulates markets for agricultural production in the State.
  • “Trade area” means any area of location, place of production, collection and assembly including-
    a) Farm gates,
    b) Factory premises,
    c) Warehouses,
    d) Silos,
    e) Cold storages,
    f) Any other structures or places,

From where the trade of agricultural products attempted in the trade area of India excluding some area according to the Act, such as market sub-yards, sub-market yards, the principal market yards, private market yards, private market sub-yards, direct marketing collection centres and private-consumer market yards managed by persons holding a license or any warehouses, silos, cold storage or other structures notified as markets or deemed markets under each state APMC Act in force in India.

Promotion and Facilitation of Farmer’s Produce Trade And Commerce (Promotion and Facilitation) Bill, 2020:

1) This Act says that any farmer or trader or online trading and transaction platform shall have the freedom to carry on the interstate and intrastate and trade in the agricultural products produced in a trade area.


  • Without a permanent account number allowed under the Income-tax Act, 1961 or any such document under the Central Government no trader can trade in agricultural products except the farmer produce organisation or agricultural cooperative society.
  • If it is so in the public’s interest, the Central Government may prescribe a system for electronic registration for a trader to do trade in the trade area.
  • The trader has to make the payment to the farmers on the same day of the delivery or within a maximum three working days, and receipt of the delivery shall be provided on the same day mentioning the due payment.

The Central Government may prescribe a different payment method by farmer produce organization or agriculture cooperative society. It may lead by any Central Government Organisation, such as Sub-ordinate or attached office, Government-owned, or promoted company or society, to develop a Price Information and Market Intelligence System for farmers produce and a framework to disseminate the information.

3) The person establishing and operating electronic trading and transaction platform needs to prepare and implement acceptable exchange practices.
Suppose the Central Government advises that it is essential and practical in the public interest. In that case, the trader has to specify the procedure and code of conduct, norms, manner of registration, technical parameters, logistics arrangements, and quality assessment of expected farmers production and mode of payments in a trade area.

4) There will be no market fee or levy in any agricultural products trading by any name under any State APMC or any other state law in a trade area.

Discussion Resolution:

1) In case any controversy or error arises in any transaction between the farmer and trader under section 4, both the parties will solve the problem mutually through conciliation by filing an application to the Sub-Divisional Magistrate. And he can refer the problem to the Board of Conciliation appointed by him.

2) If any party fails to make a recommendation to appoint any person in the Board of Conciliation, the Sub-Divisional Magistrate shall appoint such person depending on his own decision.

3) When there is a settlement during the course of conciliation proceedings, a memorandum of settlement shall be drawn accordingly by signing both the party.

4) If the proceeding fails to settle the problem, the Board can approach the Sub-Divisional Magistrate, the “Sub-Divisional Authority.”

5) The manner and procedure for filing an inquiry before the Sub-Divisional Authority and appeal before the appellate authority shall be defined.

6) An appeal filed under this section shall be heard and disposed within ninety days from filing. It should be in prescribed formats. It may order as-

  • For the recovery of the amount payable t the farmers and traders,
  • Impose a penalty as stipulated in sub-section of 11, or
  • Suspend for such period as he deems fit for or cancels the right to operate as electronic trading and transaction platform,
  • It is also mentioned that the appellant shall be given an opportunity of being heard before disposing of an appeal.


1) If you disobeyed the conditions of section 4 or the rule thereunder, you should pay a penalty of not less than twenty-five thousand rupees and extend up to five lakh rupees. And if it is a continuing one, you have to pay five-thousand per day after the first day during the contravention continues.

2) If you owned or controls or operate electronic trading and transaction platform and break the provision of section 5 & 7 or the rules thereunder, should pay the penalty not less than fifty-thousand and it may extend up to ten lakh rupees. And if it is a continuing one, you have to pay ten-thousand per day after the first day during the contravention continues.

How will it work?

1) The Central Government may issue instructions, directions, orders or guidelines to carry out the provisions of this Act to any authority or officer subordinate to the State Government or Central Government, electric trading and transaction platform, or any person or traders.

2) No prosecution or other legal proceedings shall fabricate against the Central Government or State Government or any official of the Central Government of the State Government or any person in respect of anything done in good faith or intended to be done under this Act or any rules thereunder.

3) No civil court has any power to entertain any proceedings regarding any matter under this Act.

4) The Act is not applicable for the Stock Exchange and Clearing Corporations recognized under the Securities Contracts Act, 1956, and any transaction.

5) Every rule made by the Central Government under this Act shall be applied as soon as it is made.

6) Any difficulty arises in giving effect to the provisions of this Act, may be removed by the Central Government by order published in the Official Gazette.

The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, is at this moment repealed.

Agriculture provides most of the world’s food and fabrics. Keeping in mind the point importance of agriculture, the State has authorized the Agricultural Produce Market Committee (APMC) Acts to develop a market-yard as the market place to procure regulation on marketing strategies of notified agricultural production.
Only Benefits and Key Features of the Bill are as follows:

1) The Bill will create an ecosystem for the farmers and traders to enjoy the freedom of choice to sell and buy agri-products.

2) It will create barrier-free inter and intrastate trade and commerce.

3) It will create the alternative for the farmers the get the better price and reduce marketing costs.

4) It will introduce the online transaction platform.

5) There will be no cess or levy for sale of the agro product under this Act.

6) Also, it will have a committee to resolve the problems of trading

India’s government had circulated the Model APMC Act, 2003, and the Model Agricultural Produce and Livestock Marketing (Promotion and Facilitating) Act 2017 to the States to reform their APMC Acts to increase competition in the agricultural good supply chain. The Bill provided the farmers the freedom to sell their products through various marketing channels to get a profitable or fair price of his production.

Agriculture does not only provide food, but it also offers raw materials for the agro-industry, which helps in the job creations and earning foreign exchange of different values. To do all this work or keep the momentum expanding, the country needs to improve the agriculture tradition.

Keeping in mind all the factors, the Central Legislation is trying to provide a competitive and hassle-free ecosystem were farmers and traders would choose or freedom to sell their products in a reasonable, transparent, and competitive environment to realize remunerative prices.


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