Govt wants to go by rulebook

Govt wants to go by rulebook

Cites its agricultural marketing rules to deny direct payment to over 13 lakh farmers

Over 13 lakh farmers bring their produce to Punjab’s foodgrain mandis twice every year,each in five to seven consignments. And a fraction of that number — represented by the politically and economically powerful lobby of nearly 40,000 commission agents — decides what they take back home.

Under instructions of the Union Food Ministry,the Food Corporation of India had during last Kharif season started issuing cheques directly to the farmers for the paddy. But it had to be stalled midway following opposition from the middlemen who boycotted all procurement for the FCI. The Central agency that procures just five to 10 per cent of the total wheat and paddy — rest is procured by five state agencies — made purchases only after the ministry withdrew the instruction.

However,the FCI contends that sooner or later,the state will have to agree to pay directly to farmers. “It remains our ultimate goal. The middlemen get four per cent commission for ensuring smooth procurement operations; their role will not be diminished if farmers are paid directly for their produce. The Punjab government has taken the plea that such a move will violate the agricultural marketing rules. The Union Law Ministry is looking into this aspect. So far,the matter has been kept in abeyance,” says Aseem Chabra,DGM (Storage),Punjab FCI.

Punjab government argues that to allow direct payment to farmers,it would have to amend the Punjab Agricultural Produce Marketing (general) rules framed in 1962,subsequent to enacting the Act. The general rules stipulate that payment for all purchase transactions in the mandis has to be routed through the commission agents.


According to the Mandi Board,Punjab has nearly 40,000 licenced commission agents. They operate as sole proprietors or partnership firms. If taken as a single business entity,the figure of active agents is around 28,000.

The commission agents enjoyed open patronage of the Parkash Singh Badal government,a favour they returned with funding and votes during polls. While it cites the rulebook on direct payment,it has been quick to amend those that gave commission agents greater say in the management of mandis. Amending the Mandi Board Act that mandated that a non-bureaucrat could be appointed as chairman of the board,a post bequeathed on Bhartiya Kisan Union (Lakhowal) chief Ajmer Singh Lakhowal,the government in 2010 pushed through an amendment in the Assembly,paving way for the appointment of a vice-chairman with a conflict of interest — Punjab Arhitya Association president Ravinder Cheema was moved in with full entitlement to government pay and perks.

As for denying direct payment to farmers,the reasons cited by the government range from emotional to logistical. They are family,says the Punjab food department. “There has never been any communication from farmers that they are exploited by commission agents or denied timely payments. On the contrary,the system has been functioning smoothly for the past many years,” says Secretary,Food and Civil Supplies,D S Grewal.

The department also cites logistical bottlenecks. “Nearly 13 lakh farmers bring their produce of wheat and paddy to the mandis. This,too,comes in five to seven consignments. For being able to pay lakhs of farmers directly,we would need to get bank accounts of all the farmers ready. It is a marathon exercise that will require three to four months. Also,since it is a major policy decision,only the new government will be able to take a call on it,” Grewal adds.

The government’s stand is in stark contrast to that of the Punjab Farmers Commission,the government’s think tank on agricultural issues. Its chairman G S Kalkat,who had in 2006 headed the panel that advocated direct payment to farmers in its report,says he still stands by his opinion. “It is an exploitative system. It is the middleman who decides the weight of the produce and unsuspecting farmers go by his word. Finally,what he hands out to him is with more cuts — loans extended in times of need at exorbitant interest rates. In 2006,when we gave the report,a notification was issued. But it was stalled after the commission agents moved court. The Mandi Board Act was enacted in 1961. Since then,several amendments have been made. So that is the most weak plea to take. It would require a strong political will to implement the decision,” he adds.

While the Badal government has made its stand on the issue clear in its affidavit submitted to the Punjab and Haryana High Court by endorsing the payment-through-agents route,the opposition Congress too is non-committal. On the reform seeing the light of day if voted to power,Punjab Congress president Captain Amarinder Singh says it will require a considered opinion. “The kisan unions are giving statements supporting direct payment. But farmers have old association with commission agents. Once we form the government,we will look into all aspects before taking a final call,” he says.