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Chandigarh: Government purchases of food grains in Punjab are expected to begin in two days, but the battle between the state and Narendra Modi’s administration for the transfer of direct benefits (DBT) from MSP to farmers is not in sight.

The Punjabi government has opposed the central government’s directive to change the current system, which requires payments to be channeled through arhatiyas, or commission agents.

The role of arhatiyas in the procurement process is guaranteed by Punjab law and, among other things, agents are known to assist farmers with loans during the growing season.

Monday, discuss launching a statewide program kisan mela, Amarinder attacked the central government led by the Bharatiya Janata party for its “unilateral” decision to “forcefully” impose DBT on the state. He said Narendra Modi’s government “is infringing on the rights of states in its attempt to dominate them”.

Last month, the Chief Minister wrote to Union Food Minister Piyush Goyal in this regard. Expressing his government’s inability to make sweeping changes to the current system on the eve of procurement, which begins on April 10, Amarinder asked the minister to postpone the changes until next year.

Goyal written back, saying the changes need to be made and stressing that Punjab was the only state not to implement them.

On Saturday, Amarinder wrote to Prime Minister Narendra Modi, calling for the existing payment system to be maintained until consensus emerged on the DBT issue. He also requested a meeting with Modi to brief him on the concerns of various stakeholders about the new system “before things get out of hand.”

This letter has not yet elicited a response.

The Modi government lobbied for DBT in procurement to ensure better prices for farmers and save them from exploitation through middlemen. But those familiar with local realities say the decision is counterintuitive, noting that arhatiyas play a key role in facilitating credit to farmers, often without collateral.


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


The contentious changes

In March, the Food Corporation of India (FCI), which purchases wheat and paddy from the Punjab and other states for the central foodgrain pool, issued a series of instructions to the government of India. State to be implemented from the Rabi marketing season (mainly the purchase of wheat) from Saturday.

He demanded the switch to DBT, in addition to obliging farmers / cultivators to present proof that they have the right to cultivate a plot of land, to claim their payment.

These two measures, the central government said, are aimed at establishing transparency in purchasing and saving farmers from exploitation. The instructions are part of the long-standing reforms that the central government has pushed for years. However, the Punjab has resisted these changes all these years.

According to experts and Punjab government insiders, one of the most important roles arhatiyas play in the state’s agricultural economy is to provide credit to farmers when needed.

There are fears that if farmers start being paid directly for their food grains, the arhatiyas will stop giving them credit.

“There will be a general reduction in credit for farmers. When the arhatiya knows that payment for a farmer’s harvest will go through him, he is assured that his credit will be paid with interest. But once out of the system, why would he take unnecessary risks? Punjab’s Agriculture Commissioner BS Sidhu said.

“Unfortunately, the banking system has not been able to replace the arhatiyas which offer unsecured loans, sometimes more than the farmer’s capacity to pay. They provide money for emergencies. Banks require a lot of paperwork and loans are only given for very specific purposes, ”he added.

Sidhu said it would be “disastrous for the Punjab to break the arhatiya system in the absence of a robust alternative institutional credit system.”


Read also: Why 3 new FCI food grain purchase orders sparked anger in Punjab


‘Loaded with problems’

Sidhu said the second requirement that farmers provide proof of authority to cultivate a plot of land should also have a negative impact on the system of leasing land for agricultural purposes.

According to the state government, at least 50 percent of cultivated land in Punjab is leased.

Speaking to ThePrint, a Punjabi government official who declined to be named said most leases are “verbal arrangements” and not recorded on paper.

“The owners don’t want to save these arrangements for two reasons. One is to evade payment of the tax on the rent they collect on the leased land, and on the other hand, under various rental rules, the tenant, if he is registered as plowing the land , can claim ownership of the land after a few years, ”added the official.

There are large tracts of land owned by NRIs who lease it for years without the plowman’s name ever appearing on paper.

“Now, if all these documents are necessary, they will not take the risk of letting their land because they could lose their land in a few years,” added the official.

Sidhu said, “The new system is fraught with pitfalls. In fact, it undermines the delicate socio-economic balance of farming families.

Kamaljit Singh, a farmer from Dalla village in Jalandhar, pointed out that the land he and his brothers cultivate 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 cultivates it or not. From now on, the whole family will depend on this person to make the payment to the other brothers, ”he added.

(Edited by Sunanda Ranjan)


Read also: Easy money, cycle of debt – why farmers in Punjab cannot get out of the clutches of arhatiyas


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