New Delhi/Mumbai - Modi said the new legislation would "unshackle" millions of farmers and help them get better prices.
This includes a rule that forces growers to sell their produce only at India's more than 7,000 regulated wholesale markets and Modi said the new legislation would "unshackle" millions of farmers and help them get better prices.
"It will also remove middlemen and let farmers sell their produce directly to buyers," Modi said.
Many farmer organisations oppose the legislation because they say that if big buyers start buying directly from producers, small growers will hardly have any bargaining power.
If big institutions start purchasing directly from farmers, state governments will lose out on the tax that these buyers have to pay at wholesale markets, Malik said.
"The current system ensures that farmers are paid immediately after selling their crop in the market yard itself. If farmers sell outside, who will ensure that they are paid the promised price?" a Maharashtra state official said.
Modi has said that the wholesale markets will operate as usual as the APMC Act has not been abolished and that farmers are simply being given an option to sell directly to buyers.
India's food processing minister Harsimrat Kaur Badal resigned on Thursday, calling the legislation "anti-farmer".
Badal's Shiromani Akali Dal party is a BJP ally with a strong base in Punjab, one of India's two bread basket states, where farmers form an influential voting bloc.