Grain Trade: Punjab’s agricultural crisis now consumes arhtiyas

Setia’s isn’t an isolated case, even though it might appear unusual in the context of the considerable sway that arhtiyas supposedly wield in Punjab’s grain trade. They are the middlemen through whom the Food Corporation of India and other government agencies undertake procurement of wheat and paddy that farmers bring to the state’s mandis. The arhtiyas are the ones who get the grain that is unloaded into their mandi platforms cleaned and, then, organise its auction. They also arrange for bagging of the grains prior to their being loaded into the trucks of the successful bidders — the buyers are predominantly state agencies. For all these services rendered, they get a commission fee, amounting to 2.5 per cent of the purchase price.

The real power of the arhtiyas, however, derives from their direct contact with farmers, to whom they lend for cropping operations as well as meeting other personal needs. Such lending is often conditional upon the farmers delivering the harvesting grain to them. The arhtiyas, thus, earns both from the interest on the advances made and commission fee on the grain mainly supplied to government agencies. Efforts by the Punjab government to procure directly from farmers and credit payments straight into their bank accounts have failed. The reason for it has been farmers’ own preference to go through these middlemen.

But of late, the arhtiya community’s fabled power has seemingly been on the wane, as growing distress among debt-ridden farmers, following successive crop failures and crashing prices, has started affecting its business as well. Not only have many arhtiyas stopped lending to farmers, there are reports of some even resorting to taking their lives due to large irrecoverable advances made from funds borrowed from the market.

Ravinder Singh Cheema, vice-chairman of the Punjab Mandi Board, estimates that 250-300 big and medium arhtiyas across the state may have committed suicide in the last 5-6 years. That includes at least half a dozen in just the past six months in Bathinda’s Bhagta Bhai Ka mandi and grain markets in Amritsar, Khanna, Abohar and Budhlada.

“We attended their last rites and even met the family members. None wanted to come out in the open and admit to their blocked monies in the market. The reasons for the suicides were hushed up. For them, it’s a matter of family honour and reputation,” he pointed out. The families have all since shut shop, even as court cases are on to recover the outstanding amounts.

According to Kalra, arhtiyas flourish only when farmers do well. “When there is crop failure, the arhtiya cannot force farmers to return the money. Nor can he go to court because the entire arhat business is based on good faith. And if farmers commit suicide, their monies are gone forever,” he noted.

Punjab has around 26,000 mandi-licenced arhtiyas controlling the crop of over 11 lakh farmers. Each arhtiya deals with anywhere between 20 to 200 farmers, who go through them mainly for the ease of obtaining advances. “Which government bank will lend to me if some emergency crops up in the middle of the night?” asked Mohan Singh, a six-acre farmer from Jamsher village in Jalandhar district. He admitted to even borrowing from an arhtiya to repay a bank loan that would otherwise have led to forfeiture of his land.

The arhtiyas were traditionally from mercantile communities such as Bania/Marwari and Khatri/Aroras, but the last two decades and more have also seen those from farming backgrounds enter the trade. An

estimated 40 per cent of Punjab’s arhtiyas today are Jat Sikhs, who aggregate the produce of their fellow farmers.

But the ongoing agricultural crisis, across crops from wheat and basmati paddy to cotton, has considerably pushed back the trade. Only three years back, Khanna mandi, one of India’s biggest grain markets, had 300-plus licenced arhtiyas. That number, according to latest available records available, is down to 240. And even out of those, only around 150 are said to be active arhtiyas.

Pawan Kumar, an arhtiya at Khanna with more than two decades of experience, is among those finding the going tough now. “Over Rs 5 crore of my money is blocked. With basmati prices flat, I have shellers who have outstandings with me from 2014,” he complained.

His sentiment is shared by a fellow arhtiya, Varinder Kumar Guddu. “My sons have diversified into solvent extraction and flour mill business. I’m the only one still doing arhtiya work, but there isn’t going to be after me. The blocked monies in the market are only increasing, even while land values of farmers are falling,” he observed.

Traders reckon that the Khanna market alone has Rs 150 crore of commission agent monies being blocked, with farmers and rice shellers unable to clear their due. A similar situation prevails across other mandis from Jalandhar, Moga and Ferozepur to Amritsar and Gurdaspur.

One sign of the changing times is the disengagement of the youth from the arhat trade. Cheema claimed that most arhtiyas one would find today are in the 40 to 70 years age group. The younger generation is simply not willing to adopt this traditional family business.

“My son has gone to Canada to study and is unlikely to return. My commission agency shop will have to shut down in the event,” stated Kamaljit Singh, yet another arhtiya of Khanna, who is owed large sums by farmer and sheller clients. The same story was repeated by Prem Kumar, a Jalandhar-based arhtiya: “My son has done engineering and is working with an MNC. He will never join me”.