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Why 3 new FCI foodgrain procurement orders have triggered anger in Punjab

The 3 orders include one calling for direct payment to farmers, bypassing arhatiyas, and another that requires tillers to prove they have authority to cultivate a certain plot to claim money.

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Chandigarh: Three Food Corporation of India (FCI) orders regarding foodgrain procurement, issued earlier this month, have created a flutter in Punjab, where they are seen as a source of upheaval in one of the state’s most significant politico-administrative exercises.

One of these orders seeks to reiterate a decade-old central government push for direct payment to farmers, instead of the money being routed through arhatiyas or commission agents. The second order requires farmers to submit proof that they are authorised to cultivate a certain piece of land in order to claim payment. Under the third order, the central government has tightened quality yardsticks for wheat and paddy to be procured. 

While the order regarding foodgrain quality will come into effect from the next marketing season, the other two have to be complied with by Punjab before procurement of wheat begins on 10 April.

The orders are seen as difficult to implement because a) the arhatiyas are believed to be an important link in the procurement chain as they provide assistance to farmers through the year, for example, through loans for sowing, and b) an estimated 50 per cent of the state’s farmers offer their land on lease, and it is feared that not all tillers have the required documents.

Addressing the assembly earlier this month, Chief Minister Captain Amarinder Singh said the direct payment order was “another provocation that will further aggravate the current crisis over the farm laws”.

“Instead of amicably resolving the farmers’ issue, the central government was fuelling further angst among them,” he added, saying that seeking land records for making direct e-payments to farmers would worsen the situation.

With less than a year to go for assembly elections, where any perceived glitches in the procurement process can have a major fallout in Punjab, the chief minister has shot off letters to the prime minister and the Union food minister, expressing Punjab’s inability to comply with the instructions. 

“The Chief Minister wrote that these decisions of the Government of India were going to have a major impact on the farmers who were already going through a crisis. He also pointed out that this state government was not consulted before these decisions were taken,” Suresh Kumar, Chief Principal Secretary to the CM, told ThePrint.

On Wednesday, the CM said he had asked the prime minister to intervene and defer the decisions for one year.

ThePrint made calls to FCI Haryana General Manager Om Prakash, who is currently officiating as the GM for FCI Punjab too, for a comment on this report, but there was no response until the time of publishing.

Also Read: Punjab’s frustration & anger is rooted in its steep decline, now visible in farmers’ protests

The procurement system

Procurement is by far one of the most important administrative exercises for the Punjab government. The herculean exercise of wheat procurement begins in the first week of April and continues for two months. During this period, the Punjab government procures almost 127 lakh metric tonnes of wheat on behalf of the FCI, spending Rs 26,000 crore. At least 12 lakh farmers are involved in the exercise. 

In the current system, the payment for the crop is first made to the arhatiyas who then distribute it among the farmers. The government aims to complete the payment process within 48 hours of the wheat being brought into mandis for sale. 

Earlier this month, the Union Ministry of Consumer Affairs, Food and Public Distribution asked Punjab to implement an online direct payment system from the coming rabi marketing season (2021-2022), noting that most states had adopted it. 

“The system in Punjab is of online payment but routed through the arhatiyas. More than 12 lakh farmers are registered with the department and have received payment into their accounts since last year’s kharif season. The money is first given to the arhatiyas who then transfer it to farmers’ accounts,” said K.A.P. Sinha, secretary, department of food and civil supplies, Punjab.

The Government of India, however, is insisting on direct payment to farmers. 

The central government has been trying to implement the direct payment system for farmers since 2012. However, in Punjab and Haryana, where arhatiyas have vociferously opposed the system, the old system continued for years afterwards. 

Haryana shifted to partial direct payment in 2019, giving its farmers the option to take payment directly or through arhatiyas. From this year, it has agreed to entirely shift to the direct payment system, making it more difficult for Punjab to continue its opposition. 

“The FCI officials are not ready to listen to any reasoning or logic that we put up in the meetings, insisting that their instructions have to be followed,” said a Punjab food and civil supplies official, talking to ThePrint on condition of anonymity.

“Now that Haryana has agreed to follow the Government of India’s instructions to a T, Punjab is not left with any argument.”

The FCI’s demand for land records is seen as yet another move that will create hurdles in procurement. “It is clear that the FCI decisions are targeted at us. The FCI is seeking land record details to set up DBT (direct benefit transfer) for procured grain, knowing fully well that the actual cultivators in many cases are different from the land owners,” said Dr Darshan Pal of the Samyukt Kisan Morcha, which is leading the farm laws agitation, in a statement issued last week.

On Wednesday, CM Amarinder Singh said around 50 per cent of the state’s farmers give their land on lease.

“Thousands of farmers are cultivating land leased informally from the owner without even a written agreement. While they can claim to be tillers on the government of India portal, in the land records, they are not shown as tillers to back up their claim,” said the food and civil supplies official. 

“How will they get their payment? Then there are cases where there is a written or formal agreement under the various tenancy acts between the land owner and the tiller but land records might not be up-to-date to reflect the relationship,” the official added.

Said Pal, “In the meeting of 32 farmers organisations of Punjab, it was decided that farmers of Punjab will not submit the land record related papers.”

Punjab Food and Civil Supplies Minister Bharat Bhushan Ashu said the Government of India had given the state too little time to implement its instructions. “How is the Government of India expecting lakhs of farmers to first get a copy of the farad of their land and then upload it? And all this has to be done just 10-15 days before the procurement is about to begin. It is not possible,” he told journalists this week.

In a statement issued Wednesday, CM Amarinder noted that the “land ownership and tenancy issues may give rise to various avoidable legal complications, especially during the ongoing farmers’ agitation, besides causing avoidable unrest and anguish among the farmers”.

Earlier this month, he also expressed support for arhatiyas. “Punjab had a time-tested system in place in 1967, with farmers getting paid through the arhatiyas with whom they had excellent relations and on whom they could depend for financial support in times of adversity,” said the CM in the assembly.

Political significance

Politically, it is essential for the party in power to ensure smooth procurement. “This will be the last kharif procurement before the state goes to polls early next year and, for Chief minister Captain Amarinder Singh, it is imperative that the whole exercise goes through without a hitch,” said Dr Kanwalpreet Kaur, a political scientist based in Chandigarh.

“A failed or even a less than perfect procurement exercise ahead of the elections will be fodder to the opposition.” 

Arhatiyas, who are supporting the farmers in their agitation against the new farm laws, are a “politically important group of people,” she said. 

“They have been catering to families of farmers for the past several decades and are used to mobilise crowds in election rallies and even large vote banks. They are a class no politician can afford to annoy,” she added.

Also Read: MSP, subsidies are at root of Punjab’s farm crises but its farmers are fighting to keep them


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  1. Till the time Centre categorically said the payment of MSP for wheat procurement will be done only under DBT mode, even independent journalist, whether Magsaysay winner are others seeking patronage for promoting indepy journalism, did not dwelve into the matters regarding farmer protests spearheaded by kisan unions. I surprised how the left leaning kisan union leaders are on the side of commission agents and not ont the side of tilling and toiling farmers. Before the Punjab assembly elections, the dynamics may undergo changes.

  2. So much political support for the middlemen who skim off the payments. As much as The Print tries to hide it, the real reasons are not lost on us.

  3. Please correct your headline. It should read “……triggered anger among middle-men and other leeches in Punjab”.

  4. It seems more than farmers, brokers are affected. Why should farmers worry?
    Why should govt incur commission expense of 1400crs, when it can directly pay the farmer. If farmer wants to pay commission it is his/ her choice.

    Direct payment to farmer is a must to empower a farmer. Any other method can only make a farmer dependent.

  5. It appears that it is mainly the arhatiyas who are having a problem because the move deprives them of exploitative power over the farmers.

    Regarding lack of proper documents, why are farmers exempt from this. In every other sector, there are severe implications for “informal” arrangements and lack of proper documentation. Are farmers above the law?

  6. FCI should not buy any grains from Punjab till there is complete transparency in procurement and money reaches the intended recipient.

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