Section 457

Agriculture Promotion Companies.—(1) Notwithstanding anything contained in this Act or any other law for the time being in force, any person, having its Principal line of business related to produce for agriculture promotion or managing produce as collateral or engaged in any activity connected with or related to any Produce or other related activities may establish Agriculture Promotion Company under this section in such form and manner and subject to such terms, conditions and limitations as may be specified.

Explanation.—For the purpose of this section:

(a) “Agriculture Promotion Company” includes a Producer Company or a Collateral Management Company involved in Produce or any other company or class of companies or corporate body or any other entity as the concerned Minister-in-Charge of the Federal Government may, by notification in the official Gazette specify as Agriculture Promotion Company under this section;

(b) “Produce” means—

(i) produce of farmers, arising from agriculture (including animal husbandry, forest products, re-vegetation, bee raising and farming plantation products), or from any other activity or service which promotes the farming business; or

(ii) any product resulting from any of the above activities, including by-products of such products;

(iii) any activity which is intended to increase the production of anything referred to in above sub-clauses or improve the quality thereof;

(2) Producer Company means any company, with or without share capital, formed under this section by farmers and engaged in any activity connected with or related to any Produce including the following matters-

(a) production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of produce of the members or import of goods or services for their benefit;

(b) processing including preserving, drying, distilling, brewing, canning and packaging of produce of its members;

(c) rendering technical services, consultancy services, training research; and development and all other activities for the promotion of the interests of its members;

(d) arranging insurance of produce; and

(e) financing of procurement, processing, marketing, extending of credit facilities including microfinance subject to such terms and conditions as may be specified, or any other financial services to its members;

(3) Every Producer Company shall deal primarily with the produce of its members for carrying out any of its activities.

(4) For the purposes of this section, member of a Producer Company means farmers as promoters and sponsors of a Producer Company and farmers admitted to membership after registration in accordance with requirements as specified in the regulations.

(5) Collateral Management Company means any company formed under this section to engage in the activity of managing produce as collateral, including but not limited to the following matters:

(a) warehousing, i.e., provision of quality storage and preservation services for a range of agricultural commodities;

(b) issuance of credible warehouse receipts for agricultural commodity financing; and

(c) stock audit and verification services;

(6) If an Agriculture Promotion Company or Collateral Management Company or Producer Company or their members indulges in any activity which is prejudicial to the interests of farmers, members, lending institutions, commodity exchange, consumers, or other stakeholders, shall be liable to a penalty of level 3 on the standard scale.

(7) Any dues outstanding against agriculture promotion company under this section shall be recoverable as arrears of land revenue.

(8) Notwithstanding any provision of this section, the Government or any institution or authority owned and controlled by the Government may form an Agriculture Promotion Company.

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