Damaging, unresponsive’: Punjab rejects Centre’s agricultural marketing policy
Calls it an infringement on state rights, financially damaging, and silent on MSP
3 min read
Punjab, one of India’s largest producers of wheat and rice, operates within a well-established mandi system that provides farmers with an assured MSP and shields them from price volatility. The state fears the new policy will dismantle this system, exposing farmers to exploitation by private players.
After holding brainstorming sessions with stakeholders, the Punjab government has formally rejected the National Policy Framework on Agricultural Marketing, calling it an infringement on state rights, financially damaging, and unresponsive to farmers’ grievances. The decision was conveyed to the Centre through a demi-official letter addressed to Dr SK Singh, Deputy Agricultural Marketing Advisor, Ministry of Agriculture, on Wednesday.
The government said the draft policy failed to address the demand for a Minimum Support Price (MSP) on all crops, an issue at the heart of ongoing farmer protests at the Shambhu and Khanauri border points. Though the state has not commented directly, farmer leader Jagjit Singh Dallewal has been on a hunger strike for over a month over MSP-related concerns.
The government raised objections to the proposed reductions in Rural Development Fund (RDF) and Market Development Fund (MDF) rates, which currently stand at 3 per cent each. The draft suggests reducing these to 1 per cent each, while remaining silent on the 2.5 per cent commission for arhtiyas (commission agents). Punjab argued that these reductions would undermine its ability to maintain infrastructure, including its 1,900 mandis and 70,000 km of road network supporting grain procurement for the central pool.
Additionally, the state emphasised that arhtiyas, who facilitate procurement worth Rs 1 lakh crore annually, are a crucial part of the supply chain, and denying them commissions could disrupt the system.
Punjab also opposed the Centre’s proposal to convert silos into mandi spaces, arguing that such a move would deepen farmers’ fears of corporatisation. Instead, the government recommended that grains should first pass through state mandis before being stored in silos to utilise Punjab’s existing infrastructure worth millions.
The state criticised the Centre’s plan to establish a committee involving state agriculture ministers, calling it a violation of federal principles. The government had initially planned to call a Vidhan Sabha session to reject the draft but sent its response directly to the Centre due to time constraints.
Congress leader Rana Gurjeet Singh had demanded an all-party meeting to discuss the policy, but the government chose to finalise its reply after consulting farmers’ organisations, arhtiyas, agriculture experts, and economists. Agriculture Minister Gurmeet Singh Khuddian reiterated that the policy was an attempt to reintroduce the controversial farm laws repealed after prolonged farmer protests.
Punjab, one of India’s largest producers of wheat and rice, operates within a well-established mandi system that provides farmers with an assured MSP and shields them from price volatility. The state fears the new policy will dismantle this system, exposing farmers to exploitation by private players.
Khuddian criticised provisions such as a single national tax on goods sold in mandis, likening it to the Goods and Services Tax (GST) system, which he claimed has financially strained states. “The Centre promised incentives under GST, but states had to plead to recover their dues,” he said.
The minister warned that the draft framework prioritises privatisation and risks destabilising Punjab’s existing mandi network, road infrastructure, and procurement mechanisms.
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