Chandigarh: Government procurement of foodgrains in Punjab is set to begin in two days but there is no end in sight for the battle between the state and the Narendra Modi administration over the direct benefit transfer (DBT) of MSP to farmers.
The Punjab government has opposed the central government’s directive to change the current system, which requires payments to be routed through arhatiyas, or commission agents.
The role of arhatiyas in the procurement process is guaranteed under Punjab law and, among other things, the agents are known to help farmers with loans through the cultivation season.
On Monday, addressing the launch of a state-wide kisan mela, Amarinder lashed out at the Bharatiya Janata Party-led central government for its “one-sided” decision to “forcibly” impose DBT on the state. He said the Narendra Modi government was “encroaching upon the rights of the states in its bid to dominate them”.
Last month, the chief minister had written to Union Food Minister Piyush Goyal in this regard. Expressing his government’s inability to make widespread changes in the current system on the eve of procurement, which begins on 10 April, Amarinder asked the minister to postpone the changes till next year.
Goyal wrote back, saying the changes have to be carried out and pointing out that Punjab was the only state that was not implementing them.
On Saturday, Amarinder wrote to Prime Minister Narendra Modi, seeking continuance of the existing system of payment until a consensus is evolved on the issue of DBT. He also sought a meeting with Modi to apprise him of the concerns of various stakeholders about the new system “before the situation gets out of hand”.
This letter is yet to draw a response.
The Modi government has been pushing for DBT in procurement to ensure better prices for farmers and save them from exploitation by middlemen. But those privy to local realities say the decision is counter-intuitive, noting that arhatiyas play a key role in facilitating credit for farmers, often without collateral.
The contentious changes
In March, the Food Corporation of India (FCI), which procures wheat and paddy from Punjab and other states for the central food grain pool, issued a set of directions to the state government to be implemented from the Rabi marketing season (mainly procurement of wheat) beginning Saturday.
It sought the shift to DBT, besides making it binding on farmers/cultivators to present proof that they have the right to cultivate a plot of land, to claim their payment.
Both these moves, the central government has claimed, are aimed at bringing in transparency in procurement and saving farmers from exploitation. The instructions are among long-standing reforms that the central government has been pushing for years. Punjab has, however, been resisted these changes all these years.
According to experts and Punjab government insiders, one of the most significant roles that the arhatiyas play in the state’s agricultural economy is providing credit to the farmers as and when required.
There is a fear that if farmers begin to be paid directly for their foodgrains, the arhatiyas may stop extending credit to them.
“There will be widespread shrinking of credit for the farmers. When the arhatiya knows that the payment of a farmer’s crop is going to go through him, he is assured that his credit will be paid with interest. But once he is out of the system, why would he take unnecessary risks?” said Punjab Agriculture Commissioner B.S. Sidhu.
“The banking system has unfortunately not been able to replace the arhatiyas who offer credit without collateral, sometimes more than the payment capacity of the farmer. They provide money during emergencies. The banks require a lot of paperwork and loans are given only for very specific purposes,” he added.
Sidhu said it will be “disastrous for Punjab to break the system of arhatiyas in the absence of an alternative robust system of institutional credit”.
‘Fraught with problems’
Sidhu said the second requirement, that farmers provide proof of authority to cultivate a plot of land, is also expected to have an adverse impact on the system of leasing land for farming.
According to the state government, at least 50 per cent of the land under cultivation in Punjab is on lease.
Speaking to ThePrint, a Punjab government official who didn’t wish to be named said most of the lease agreements are “verbal arrangements” and not recorded on paper.
“Landlords do not want to bring these arrangements on record for two reasons. One is to evade payment of tax on the rent they gather from the leased land and second under various tenancy rules, the tenant, if shown on record as tilling the land, can claim ownership of the land after some years,” the official added.
There are vast tracts of land belonging to NRIs who lease it for years on end without the tiller’s name ever appearing on paper.
“Now if all this paperwork is needed, they will not risk giving their land on lease as they might lose their land in a few years,” the official added.
Sidhu said, “The new system is fraught with problems. It actually strikes at the delicate socioeconomic balance among farming families.”
Kamaljit Singh, a farmer from Dalla village in Jalandhar, pointed out that the land he and his brothers till is still in the name of his father, who died several years ago.
“So, who gets the payment now? In many cases, the land is in the name of a brother who may or may not be tilling it. Now the entire family will be dependent on that person to make the payment to the other brothers,” he added.
(Edited by Sunanda Ranjan)