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Punjab govt agrees to implement direct bank transfer of MSP for farmers from 10 April

Punjab CM Amarinder Singh has called a meeting with 'arthiyas' (commission agents) Friday to discuss about a new mechanism ahead of wheat procurement that will commence from 10 April.

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New Delhi: Punjab Finance Minister Manpreet Singh Badal on Thursday said the state government has “no choice” but to implement the Centre’s mandated instruction on direct bank transfer of MSP to farmers from the current season.

Badal, after a lengthy discussion with Union Food Minister Piyush Goyal on this issue, said the Centre rejected the state government’s demand to give more time to implement direct bank transfer (DBT) of minimum support price (MSP) to farmers.

The Punjab Chief Minister has called a meeting with ‘arthiyas’ (commission agents) on Friday to discuss about a new mechanism ahead of wheat procurement that will commence from April 10.

Punjab procures wheat and rice at MSP on behalf of the central government under the National Food Security Act (NFSA). Currently, MSP to farmers in Punjab is paid through arthiyas unlike directly to farmers’ bank account in other states.

“The Government of India (GoI) had asked us to implement the DBT for farmers. We had sought more time because in Punjab there is a traditional arthiyas system. ….But the GoI dismissed our demand. We tried a lot but they did not listen,” Badal told reporters after 2.30 hours of meeting.

The state government has “no other choice” but to implement the DBT for farmers from the current season itself and a new mechanism will be worked out, he said.

Citing reasons for rejecting Punjab’s demand, Badal said the central government was arguing that the food stock procured belongs to it and the state government is just an agent and should make payment directly to farmers.

“But arthiyas are traditional system and one needs to understand this. It is difficult to unravel this system. ….We will come out with a mechanism,” he added.

Besides Badal, Punjab Food Minister Bharat Bhushan Ashu, PWD Minister Vijay Inder Singla and Mandi Board Chairman S Laal Sing were present in the meeting. Senior officials from Union Food and Agriculture Ministries were also present.

The Punjab Food Minister said, “Tomorrow, we will meet arthiyas and take them into the loop. We will develop a mechanism that will give some protection to arthiyas. The CM has kept a meeting with arthiyas tomorrow.”

From April 10, wheat procurement will start and every grain will be purchased, he said, and added, “The payment will go directly into the (bank) account of farmers.”

Speaking to PTI, Union Food Secretary Sudhanshu Pandey said, “Punjab ministers in the meeting agreed to implement the DBT for farmers from this season. Currently, MSP payment is routed through arthiyas. We are asking them to pay directly to farmers.”

State governments were asked to implement DBT to farmers in 2018. By 2019, almost all states started implementing it except for Punjab, he said.

Among other issues, the Punjab Finance Minister said the Centre has agreed to defer implementation of land records integration (required to track land ownership of farmers during procurement) by six months.

On release of pending rural development Fund (RDF) to state government, the minister said about 3 per cent RDF is fixed for Punjab. The state is getting only one per cent and rest two per cent is pending.

“GoI is not happy with the justification given by us. They assured that GoI will release arrear of two per cent fee if the state government gives a credible justification on where the funds have been spent,” he said.

The Punjab Finance Minister in the meeting raised concern about piling stock of foodgrains in the state and requested for an early liquidation so that there is space for the new crop.

“GoI has given assurance that it will take foodgrains stock out of Punjab,” he said and added the Centre has also assured it will release the dues worth Rs 15,000 crore earliest to the state.

The minister also informed the Centre that the state will implement the distribution of fortified rice via Public Distribution System and welfare schemes like Midday Meal Scheme.

Also read: Centre ‘punished’ Delhi govt for supporting farmers protest, says Arvind Kejriwal


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  1. BIG WIN FOR MRS. YOGENDRA YADAV AND RAKESH TIKAIT. Do we read an article on this success By Dr. Yadav?

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