Despite the union food ministry's directions on direct payment, the Punjab government is paying the minimum support price (MSP) for wheat to farmers through commission agents (arhtiyas).
State government officials, at a meeting with the union food secretary in February, had refused to make direct payment to farmers for the wheat crop, while stating that they would pay through arhtiyas in the forthcoming rabi marketing season. The state government has also demanded relaxation in the norms, but the central government is yet to respond.
"We have started making payments to arhtiyas. They are supposed to transfer the amount to farmers within 48 hours," DS Grewal, food secretary, Punjab, told Hindustan Times. Crop arrival in small quantities has been reported in Ajitgarh, Fatehgarh Sahib and Patiala districts.
"As the Punjab State Agriculture Marketing Board is the nodal agency for procurement in the state, the rules framed by the agency are to be followed. As per these rules, procurement agencies have to operate through commission agents and can't deal directly with farmers," Grewal added.
The 'influential' lobby of commission agents in Punjab had threatened to go on strike in case payments were made directly to farmers. Much to the arhtiyas' relief, the Punjab government is claiming that the state lacks adequate machinery to deal directly with farmers, and no such arrangement can be made in the current procurement season. As per the state government, it is easier to deal with 20,232 arhtiyas rather than 12 lakh farmers' families.
"I made it clear to the union food secretary. Now, the ball is in the Centre's court," Grewal said.
The Food Corporation of India (FCI), which is responsible for public distribution in the country and also procures foodgrains (wheat and paddy) from the states, is not keen on functioning through commission agents. The FCI has been insisting on direct payment of the MSP to farmers.
Justifying its stand, Punjab has quoted the Punjab Agricultural Produce Market (general) Rules, 1962, in which direct payment to farmers is not permissible.
For the past two marketing seasons - rabi (wheat) 2011 and kharif (rice) 2011 - the Centre has been insisting on direct payment. Meanwhile, the union law ministry is examining the 1962 rules, as Punjab has claimed that the FCI is a licensee of the state's agro industries corporation and it has to follow the state's regulations.
There is no law or precedent which mandates the Centre's claim of dealing directly with farmers. This decision was reached after complaints from Uttar Pradesh and Bihar that farmers were not receiving payment for their crop. "But no complaint ever came from Punjab," said an FCI official.