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Current Affairs 2020


Contract Farming in India Issues

The government has been making efforts to integrate farmers with agro-industries to ensure that they get better prices for their produce. This is why contract farming has come to be seen as a panacea. Contract farming refers to an agreement between farmers and marketing firms for the production and supply of agricultural products under forward agreements, frequently at predetermined prices. The contract between farmers and buyers insulates farmers from price risk, helps them develop new skills, and opens new markets.

Nevertheless, contract farming suffers from market failures.


  • Typically, contract firms enter into an agreement with farmers to grow differentiated crops.
  • This turns the firm into a sole buyer and farmers into price-takers. Contracting firms can exploit this situation to their advantage by offering lower prices to farmers.

Information asymmetry: Contracting firms do not have complete information on productivity and land quality. This can lead to a situation where farmers produce below-quality crops. On the other hand, farmers sometimes do not understand contract specifications like the quantity and quality to be produced, or the effect of price change. These market failures lead to suboptimal outcomes. Buyers may penalize farmers. Similarly, farmers may indulge in side-selling or leak the technology provided by the contracting firm. Therefore, the question is: Is there a role for the government to intervene in the contract farming market, and what should it do to address market failures?

In India, contract farming is regulated under the Indian Contract Act, 1872. The Act has many general provisions that are relevant to contract farming, including the formation of contracts, obligations of parties, and consequences in case of breach of contract. In addition, the model APMC (agricultural produce market committee) Act, 2003 provides specific provisions for contract farming, like compulsory registration of contract farming sponsors and dispute settlement.

  • The department of agriculture and farmers welfare has now come out with a draft model contract farming Act, 2018. It intends to establish a win-win framework for both farmers and sponsors. Instead, some of the clauses do the opposite.
  • The model contract farming Act proposes a state-level agency, the Contract Farming (Development and Facilitation) Authority, which would put contract farming outside the ambit of the APMC.
  • The model Act requires the sponsor and the farmers to register the contracts with a registering and agreement recording committee.
  • Registration imposes additional procedures and costs on the parties, and small and medium farmers cannot easily afford these costs.
  • The Act also proposes price protection for farmers by determining a pre-agreed price.
  • This will be counterproductive. How would the sponsors incentivise the farmers to perform if the state provides farmers a perverse incentive to not perform?
  • The entire premise of the model contract Act seems to be aimed at creating a legal infrastructure to ensure that both parties honour the contract.
  • This approach is flawed. The government should correct for problems that lead to contract failures and not put both parties into an “inconvenient marriage”. Some measures could include:

Foster more competition: 

  • The government needs to create market-based incentives for both farmers and buyers. It should improve farmers’ connectivity to spot markets and mandis across the country.
  • E-NAM (National Agricultural Market) is a great initiative in that direction.
  • This would encourage contracting sponsors to raise their bids and compete to enrol farmers to secure input supplies. The competition amongst sponsors would also incentivise them to offer better terms and services to farmers.

Provide public goods: 

  • The government should maintain an information repository of farmers and contracting firms. The repository can provide details about farmers or farmer producer organizations with regard to land availability, default rate, and performance standards.
  • Similarly, details of sponsors can include services provided, requirements of crops, and the default rate.
  • This will help farmers and sponsors to evaluate each other prior to engaging in contracts. Also, the government can facilitate the establishment and enforcement of standards for crops. This will set clearer expectations regarding the contracted crop.

Encourage softer means for enforcement:

  • Incorporating risk-sharing mechanisms in contracts, incentive schemes, repeated contracting and renegotiation options, and simplified and transparent contract terms would help in contract enforcement.
  • The government can educate farmers and make them more aware about contract farming and model contracts.
  • In conclusion, it may be said that the model Act makes a good move in the direction of promoting contract farming. However, the bureaucratic hurdles instituted in the form of a new regulator to oversee contract enforcement will be counterproductive.
  • The government should focus on providing an enabling environment by fostering competition and bridging information asymmetries between farmers and buyers.
  • Unless this ecosystem is provided, there is very little reason to believe that the new model Act can promote contract farming.


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Tenure and salaries of CIC and ICs under the Right to Information Rules, 2019

The Right to Information (Amendment) Act, 2019 amended the Right to Information Act, 2005.  The RTI Act, 2005 specified the tenure, terms of service

All States can now constitute Foreigners Tribunals

Context: The MHA has amended the Foreigners (Tribunals) Order, 1964, Changes proposed as per the amendment: It has empowered district magistrates in

Three Language formula

Why is it in the news now? A 50-year-old controversy got a new lease of life recently when a paragraph in the Draft New Education Policy 2019 referr

Hong kong Protest

Context: Huge protests in Hong Kong. Reasons behind: The protesters were marching against proposed changes in the law that would allow suspects accus

Bharat Stage

Context: International Centre for Automotive Technology (ICAT) has released India’s first Type Approval Certificate (TAC) for Bharat Stage – V

Leader of opposition

Why in News? Congress, with 52 MPs, has declined to stake claim for the position of Leader of Opposition in Parliament. Background: Any party that

Shanta Kumar Committee

Context: Union Minister of Consumer Affairs, Food and Public Distribution, Shri Ram Vilas Paswan lays down the future roadmap for Food Corporation of

What is Strategic arms reduction theory?

Context: Russia has warned that it was prepared to drop New START treaty with the U.S. and warned of “global catastrophe” if Washington keeps di

Cabinet Committees

Context: The Union government has released the composition of eight Cabinet Committees, including two new ones — one on Investment, the other on Em


Context: The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved that the ambit of the Pradhan Mantri KisanSamman Nidhi (PM-KISAN

Examining the rise of Non-Performing Assets in India

The issue of Non-Performing Assets (NPAs) in the Indian banking sector has become the subject of much discussion and scrutiny. The Standing Committee

Global Talent Competitive Index

Context: Global Talent Competitive Index (GTCI) for 2019 has been released. Background: GTCI, launched in 2013, is an annual benchmarking report that

InSight Lander

Context: NASA’s Mars Lander InSight has recorded its first ‘Marsquake.’ It has recorded a quake of 2 or 2.5 magnitude which is hard to predict o

Priority Watch List

Context: The United States has again placed India on its ‘Priority Watch List’. India has been on the priority watch list reportedly for over 25

Global Food Policy Report-2019.

Context: International Food Policy Research Institute (IFPRI) has recently released Global Food Policy Report-2019. The report reviews the major f

Pradhan Mantri Jan Dhan Yojana (PMJDY)

Why in News? Five years after its launch, the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme has almost achieved a total balance of ₹1-lakh crore.


Why in News? India’s decision to skip the Belt and Road Forum (BRF) may have led to the exclusion of the Bangladesh- China- India- Myanmar (BC

National Clean Air Programme (NCAP)

Context: MoEFCC has constituted a committee to implement the National Clean Air Programme (NCAP). Composition: The committee will be chaired by the S

World Wildlife Fund

Context: Six mammal, bird and fish species are facing the spectre of extinction in Russia according to World Wildlife Fund (WWF). These include the


Context: By inviting leaders from the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) countries, Kyrgyz Repu

World Heritage site

Context: The Orchha town of Madhya Pradesh has been included in tentative list of the World Heritage Sites of United Nations Educational, Scientif

Coral reef Bleaching

Context: Researchers have found an alarming pattern of bleaching in the reefs in Mandapam, Keezhakkarai and Palk Bay in Gulf of Mannar regions. Key fi

Chagos Archipelago Issue

Why in News? The United Nation General Assembly (UNGA) has passed a non-binding resolution asking United Kingdom (UK) to return Chagos Archipelago

Ultima Thule

Context: NASA has found evidence of a unique mixture of water ice, methanol, and organic molecules on Ultima Thule’s surface. This mixture is very d

United Nations under the definition of state

Context: The Delhi High Court has ruled that the United Nations is not a State under Article 12 of the Constitution of India and is not amenable

Masala Bonds

Context: Kerala Infrastructure Investment Fund Board issued Masala Bonds to raise funds from the overseas market. What are Masala Bonds? Masala Bond

7th Economic Census

Context: The 7th Economic Census -2019 is being conducted by MoSPI to provide disaggregated information on various operational and structural aspe


Context: The Indian Space Research Organization is planning to launch Aditya- L1 mission to study the sun early in 2020. About Aditya- L1 mission: Wha

Naming of cyclones

Context: The newest cyclone to emerge out of the Bay of Bengal has been named Fani. Before that, there were cyclones Hudhud in 2014, Ockhi in 2017 and

Sovereign Internet Bill

Context: Russian President Vladimir Putin has signed into law a “sovereign internet” bill. Key features: The measures include creating technolo

Mission Shakti

Why in News? Stating that defence and offensive space technologies are being developed with various aims of spying, gaining control, deactivating se

LG of Puducherry

Context: The Madras High Court has ruled that the Lieutenant-Governor (L-G) of Puducherry could not interfere with the day-to-day administration o

Electoral bonds

What is the Electoral Bonds Scheme? The Finance Bill, 2017 introduced “electoral bonds” — interest-free bearer bonds (like Promissory Notes) th


Context: The Commerce Ministry has asked the Health Ministry to frame a law banning manufacture and sale of e-cigarettes in the country as in the abs

Official Secrets Act

Recently ,Supreme Court has rejected the Centre’s twin arguments and ruled that classified documents accessed by the media on the Rafale fighter jet

Arms Trade Treaty

Context: US President Donald Trump has rejected the United Nations’ 2013 Arms Trade Treaty aimed at regulating the global arms trade. Trump describ


Context: Recently, China held its 2nd Belt and Road Forum (BRF) to showcase its trillion-dollar Belt and Road Initiative (BRI) without India’s p

SAGAR Programme

SAGAR Programme (Security and Growth for All in the Region) SAGAR is a term coined by PM Modi in 2015 during his Mauritius visit with a focus on blue

Project Mausam

Mausam Project ‘Mausam’ is a Ministry of Culture project to be implemented by Indira Gandhi National Centre for the Arts (IGNCA), New Delhi as

QUAD and QUAD Plus

What is QUAD and why are they coming together? The coming together of India, the US, Japan and Australia is being seen as building a strategic partner

Indo-Pacific division

India has set up an Indo-Pacific division in the Ministry of External Affairs. The new division is intended to give a coherent architecture to the

What is the Shangri-La Dialogue?

What is the Shangri-La Dialogue? The IISS Asia Security Summit was launched in 2002 by British think tank the International Institute for Strategic St

Lateral entry in India

What is lateral entry? The lateral entry mode, which pertains to the appointment of specialists from private sector in government organisations, is an


Recently A PIL has been moved in the Delhi High Court seeking directions to the Election Commission to inspect the paper slips of the VVPAT electronic

Water quality in India

Why in news? A recent report of the Ministry of Consumer Affairs, Food and Public Distribution highlight the concern with tap water quality in major I

Plague in China

China reported a third case of bubonic plague on Sunday after two other plague cases were revealed last week, but the disease remains rare despite its

Aging Population issue in India

Aging Population issue in India Ageing in India is exponentially increasing due to the impressive gains that society has made in terms of increased li

Citizenship Amendment Bill

The government intends to introduce The Citizenship (Amendment) Bill in Parliament’s Winter Session that commences on Monday and is scheduled to con


What is the recent ruling of supreme court in RTI Case? The Supreme Court ruled that the office of the Chief Justice of India (CJI) is a public author

Employment Growth in India?

Ever since the results of the Periodic Labour Force Survey (PLFS) 2017-18 became public — they showed that unemployment in India was at a 45-year

What is Edge computing?

What is cloud computing? Cloud computing — by which remote servers hosted on the Internet store and process data, rather than local servers or perso

Modi-Xi meet in Mahabalipuram for ‘Informal Summit.

What are informal summmits?What is their importance? Informal Summits act as supplementary exchanges to annual Summits and other formal exchanges such

What is IIP and why does it matter?

Why is it in News? According to the data for the “Quick Estimates of Index of Industrial Production” released by the Ministry of Statistics and Pr

Why Lok Sabha is still 543

Why the issue is in news? Last week, former Union Minister and Congress leader Jitin Prasada said the number of Lok Sabha seats should be rationalised

What is PMC Bank fraud and how it started

What was RBI’s orders w.r.t PMC Bank fraud ? The RBI also put sanctions on the withdrawal of money from the bank to just Rs 1,000 per customer f

Bangladesh v/s India growth rate

The latest economic outlook update released by the Asian Development Bank has shown how Bangladesh, and not India, is the standout economy in terms of

National Population Register

What is the NPR(National Population Register)? The NPR is a list of “usual residents of the country”. According to the Ministry of Home Affairs, a

Quantum Supremacy

What is quantum supremacy? It means only that researchers have been able to use a quantum computer to perform a single calculation that no convention

Bank Merger in India- Indepth analysis

Recently, Finance Minister Nirmala Sitharaman announced the government’s decision to merge 10 state-owned banks to create four large entities or l

What is Houthi Movement ?

What is Houthi Movement? The Houthis officially called Ansar Allah, is a Zaidi tribal political movement that emerged from and is based around Sa̵

Failed Talbian USA peace talks?

What is the result of Failed talks between USA and Iran? How has taliban responded to the failed talks? When the U.S.-Taliban talks collapsed last wee

What is Corporate Social Responsibility

What is Corporate Social Responsibility (CSR) Corporate social responsibility (CSR) is a self-regulating business model that helps a company be social

Amazon Forest Fires

The record number of fires ravaging the Amazon has drawn international outrage because of the rainforest’s importance to the global environment


NPT(nuclear non proliferation treaty ) was signed in 1968 to prevent spread of nuclear materials,technology and weapons and to develop co-operation am

India’s Three stage Nuclear Power Programme

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Causes for the slowdown in the Indian Economy

Much has been written and said about the ongoing economic slowdown in the Indian Economy. What was being indirectly said about several economic indica

NRC issue explained in detail

What is the issue? The final updated list of the National Register of Citizens (NRC) was released on August 31, 2018. Fear and disquiet have gripped n

Chief of Defence Staff

Practice so far: India has had a feeble equivalent known as the Chairman, Chiefs of Staff Committee (CoSC); but this is a toothless office, given the

Delimitation in Jammu and Kashmir

What is the provision of delimitation in Jammu and kashmir in Jammu and Kashmir reorganisation Act 2019  The Jammu and Kashmir Reorganisation Act, 20

Consumer Protection Bill, 2019

Consumer Protection Bill, 2019 The Consumer Protection Bill, 2019 was introduced in Lok Sabha by the Minister of Consumer Affairs, Food and Public Dis

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This was the first session of the Parliament after the Lok Sabha elections, the Parliament passed not only landmark bills like repealing of Article 37

Slowdown in the economy

Is Slowdown phenomenon confined to India? INDIA is not alone in suffering an economic slowdown. From Japan to Thailand, the economic scene is not rosy

The Protection of Children from Sexual Offences (Amendment) Bill, 2019

The Protection of Children from Sexual Offences (Amendment) Bill, 2019 The Protection of Children from Sexual Offences (Amendment) Bill, 2019 was intr

Hong Kong China Conflict

Is Hong Kong an independent nation? Hong Kong is semi-autonomous – with it’s own money, passports, immigration channels and legal system.

Simla Agreement

Q. What was the Simla agreement? The Simla Agreement was signed by Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto on 2 July

Unlawful Activities prevention Act amendment

Background: The Unlawful Activities (Prevention) Act, 1967 aims at the effective prevention of unlawful activities across India and abroad. Its main o

National Medical Commission Bill:

  Background: The Medical Council of India was first established in 1934 under the Indian Medical Council Act, 1933. This Act was repealed and

Article 370 and its relationship with Afghanistan

Background:Article 370 and its relationship with Afghanistan  India’s move to end the special status for Jammu and Kashmir indicates that the gov

Gilgit Baltistan Region Issue

The Gilgit Baltistan was a region of princely state of India ruled by Maharaja Hari Singh. Before independence; a rebellion occurred and rebels establ

Motor Vehicles (Amendment) Bill, 2019: Key Amendments

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Amendments to Forest Act and Tribal Revolt

Recently DISTRICTS with sizeable tribal populations saw several protests and demonstrations on Monday. The protests were organised by the Bhumi Adhika

Global Innovation Index and India’s ranking

Introduction: The Government of India has launched the Global Innovation Index (GII) in New Delhi. This is the first time that the GII is being launch

Federal Reserve Cut and its impact on Indian Economy

What is the Global Trend w.r.t easing of interest Rates? Central banks globally are moving towards monetary easing. The European Central Bank and Ba

Blockchain Technology Uses

Blockchain Technology Uses Blockchain is the digital, distributed, and decentralized ledger underlying most virtual currencies that’s responsibl

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What is the Indo-Pacific Strategy?

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Huawei company Issue and its likely impact on India?

What is Huawei company? Huawei Technologies Co. Ltd. is a Chinese multinational technology company that provides telecommunications equipment and se

Kaleshwaram project

What is Kaleshwaram Project? The total length of Kaleshwaram project is approximately 1,832 kms, of which 1,531 kms is gravity canals and 203 kms comp

Section 124 A

The recent episodes of sedition in India: Section 124 A The Delhi Police filed a charge sheet against 10 people, including former Jawaharlal Nehru

Agriculture census 2015-16

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Mahadayi river Dispute

What is the Mahadayi river Dispute all about? The dispute over Mahadayi river Dispute has resurfaced over the past few weeks and tensions have been r

What is Generalised System of preferences?

What is Generalized System of Preferences? Generalized System of Preferences (GSP) is a preferential tariff system extended by developed countries to

Masood Azhar and China

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Uyghurs Conflict of China

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BN Srikrishna Committee recommendations

The ministry of electronics and information technology (MEITY) has released a white paper on data protection framework, prepared by a committee of exp


What is Project Sashakt? Project Sashakt was proposed by a panel led by PNB chairman Sunil Mehta. Bad loans of up to ₹ 50 crore will be managed at t

Compoundable and Non-Compoundable offence in India

Compoundable or non compoundable In our society, there are certain criminal offences which are not very serious in nature. In these cases, the Indian

Cognizable and Non Cognizable offences

Offences can be classified as cognizable and non-cognizable offences. Cognizable offences are those in which the police can arrest without any warrant

Contract Farming in India Issues

The government has been making efforts to integrate farmers with agro-industries to ensure that they get better prices for their produce. This is why

Aadhaar is mandatory and not mandatory

However, the top court upheld section 139AA of Income Tax Act, which says quoting of Aadhaar mandatory for making an application for allotment of Perm


The 5-judge bench of the Supreme Court in a crucial verdict on Wednesday watered down several sections of the Aadhaar Act, in what seems to be a posit

UDAY Kotak Committee recommendations

The Securities and Exchange Board of India (Sebi) panel on corporate governance led by Uday Kotak proposed sweeping changes. The recommendations are l

Corporate Governance Rules.

The Securities and Exchange Board of India (Sebi) panel on corporate governance led by Uday Kotak proposed sweeping changes. The recommendations are l

Nuclear Supplier Group (NSG) and India’s Membership

Nuclear Suppliers Group (NSG) is a group of nuclear supplier countries that seek to prevent nuclear proliferation by controlling the export of mate

Is SCO the right organisation for India?

Read the article to find the answers on the following. Has India taken right decision to join anti-west group? Will SCO help India to address its chal

National Sports Development Bill (73)

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Bachground As per the 71st NSSO Survey on Education 2014, only 6% of rural households have a computer. This highlights that more than 15 crore rural h

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10% reservation for Economically weaker

Introduction  In the 124th Constitutional Amendment recently passed by both Houses of Parliament, providing for 10% reservation to economically weake

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