14 June, 2021

Market Shifts Middle Ground

Farmers in Punjab welcome direct payment for their produce bypassing commission agents. Their protest against the new farm laws is no deterrent.

Debt Trap
Loans from arhtiyas form a major chunk of farmers’ non-institutional debt
Market Shifts Middle Ground

This is a paradigm shift for farmers—from a system prevalent particularly in Punjab, Haryana and Western Uttar Pradesh since the beginning of the open-ended, assured procurement of foodgrain (especially wheat and paddy) at the minimum support price (MSP) in the mid-1960s, to another based on direct benefit transfer (DBT), that entails payments only through the accounts of farmers. The Centre asked all states to adopt DBT, and now Punjab, after some initial reluctance, has joined Haryana and UP in implementing it. This has changed things drastically for Punjab’s 10.53 lakh farmers as well as its 33,000 arhtiyas (commission agents or middlemen). The new system has been adopted even as farmers, largely from Punjab and Haryana, are protesting on the borders of the national capital against three farm laws passed in Parliament last year. The protestors say these laws are detrimental to the interests of farmers.

In 2011, Sukhpal Singh, professor of economics in Ludhiana-headquartered Punjab Agricultural University, did a study on the non-institutional debt of farmers...

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