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Grain mandis: These farmers are Punjab’s new-generation commission agents

At an average minimum support price (MSP) of Rs 1,800 per quintal — Rs 1,770 for paddy and Rs 1,840 for wheat — his 2.5 per cent commission on grain sold to government agencies works out to Rs 18 lakh.

Written by Anju Agnihotri Chaba | Adampur, Khanna |
Updated: April 4, 2019 12:50:32 am
Grain mandis: These farmers are Punjab’s new-generation commission agents There are many more such men — Rajpal Singh Gill, Hamir Singh, Sant Singh, Darshan Singh, Jasbir Singh, Varinder Singh and Gulzar Singh — owning arhat shops at the Khanna wholesale grain market.

Till four years back, Hoshiar Singh Boparai, a farmer from Lalon Khurd village in Amloh tehsil of Punjab’s Fatehgarh Sahib district, was selling his crop through arhtiyas (commission agents). He has since turned an arhtiya himself, earning 2.5 per cent commission on paddy and wheat sales from not just his family’s combined holding of about 100 acres, but also on the grain of 80-85 farmers cultivating 700-odd acres in villages of Ludhiana and Fatehgarh Sahib.

The 800 acres belonging to him and other farmers yield roughly 40,000 quintals of produce annually. At an average minimum support price (MSP) of Rs 1,800 per quintal — Rs 1,770 for paddy and Rs 1,840 for wheat — his 2.5 per cent commission on grain sold to government agencies works out to Rs 18 lakh.

“The arhtiyas were making money only out of our produce. At some point I thought why not do this business myself? After all, my own produce was over 5,000 quintals every year and I had a long list of relatives and friends who were also farmers,” says this 57-year-old, whose shop at the Khanna APMC (agriculture produce market committee) mandi is in the name of Boparai Trading Company and Hoshiar Singh Company.

His isn’t an isolated example.

Surjit Singh (70) of Khanna Khurd village in Ludhiana’s Khanna tehsil is a much smaller farmer. Till 2014 — the year he managed to procure a trading licence at Khanna — he was cultivating a mere six acres. Today, he is earning commission from the sales of crop in over 100 acres of 10-15 farmers.

There are many more such men — Rajpal Singh Gill, Hamir Singh, Sant Singh, Darshan Singh, Jasbir Singh, Varinder Singh and Gulzar Singh — owning arhat shops at the Khanna wholesale grain market. They are all Jat Sikhs with agricultural backgrounds — in a business traditionally a monopoly of Banias, Jains, Punjabi Khatri and Arora trading castes. Each does arhat for 50-60 farmers — acting as middlemen between the latter and government agencies, and charging a commission for “facilitating” grain procurement.

The 112-year-old Khanna APMC, the largest in Punjab, has 246 active licensed arhtiyas. At least 100 of them are Jat Sikhs, whose line of shops form a virtual sub-mandi that has even earned the sobriquet ‘Sardar Mandi’. The current president of Khanna’s Arhtiya Association, Harbans Singh Rosha, is also a Jat Sikh.

“When I entered this business in 1994, there were only a couple of Jat Sikhs here. That number has crossed 100 and is still increasing, because zamindars (farmers) aren’t getting remunerative prices for their crop and are wanting to diversify their income sources,” notes Rajpal Singh Gill, who continues to farm 125 acres (including 30 acres of his own land) in Khanna Khurd, besides “managing” the crop of some 60 farmers in 400 acres.

The trend of zamindar-arhtiyas has, moreover, spread to other mandis as well.

Around 120 km from Khanna is the APMC mandi at Adampur town in Jalandhar district. Here, the owner of “Gagandeep and Sons” shop is a 30-year-old having just over two acres of land at Nangal Fida village in Jalandhar’s Bhogpur tehsil. But Gagandeep Singh handles the crop sales of more than 200 farmers cultivating 2,000 acres. “My success is simply on account of my relationship with fellow farmers,” says this higher secondary school pass. The Adampur APMC has 60 or so active arhtiyas, of whom 80 per cent are Jat Sikh like him.

Currently, there are 48,052 arhtiyas registered with the Punjab Mandi Board (PMB). “45 per cent of them are Jat Sikh zamindars-cum-arhtiyas. That ratio would be 55 per cent in the Doaba (Jalandhar, Hoshiarpur, Kapurthala and Nawanshahr districts) and Majha (Amritsar, Gurdaspur, Pathankot and Tarn Taran) regions, while only 35 per cent in Malwa (South Punjab),” says Ravinder Singh Cheema, president of the Arhtiya Association Punjab and former PMB vice chairman.

The irony, though, is that these new-generation arhtiyas, attracted by the assured 2.5 per cent commission on government grain procurement, have also become the biggest obstacle to the adoption of direct payments to farmers.

Under the existing system, a farmer brings his produce to a mandi and unloads it at the yard of an arhtiya licensed by the local APMC. The arhtiya gets the grain cleaned and organises its auction. Once bidding is completed — a mere formality in wheat and paddy, where practically the entire grain is procured by government agencies at the fixed MSP — he then arranges for its weighing, filling into bags and stitching prior to loading into trucks. For all these services rendered, the arhtiya gets a 2.5 per cent commission on the purchase price.

The previous Shiromani Akali Dal-BJP government in Punjab sought to introduce a direct payments system to farmers, as opposed to the government agencies routing the same through arhtiyas. But the move encountered opposition not only from the arhtiya lobby, but also the majority of Punjab’s estimated 18.50-lakh farmers.

“If the arhtiya system collapses, so will we,” claims Jagjit Singh, who farms 15 acres of his own land and another 10 acres taken on lease near Adampur. “The arhtiya provides us finance at any time of the day. He makes money both through commission and lending money to us. If the arhtiya is finished, his place will be taken over by private financiers having no stakes in our crop. These are pure moneylenders and sharks only interested in our land,” he adds.

All this comes even as the government, both at the Centre and the state, has been trying hard to push online procurement of grain and direct payment to farmers. The Union Minister of Food and Public Distribution Ram Vilas Paswan, only recently, expressed concern over farmers being paid by arhtiyas through cheques and in cash. These middlemen merely maintained ‘J forms’ that said nothing about the actual receipt of payment by farmers. That farmers are actually getting the MSP is just an assumption now.

But bypassing the arhtiya and paying directly into the bank accounts of farmers is easier said than done. It is even harder when these arhtiyas are increasingly farmers themselves.

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