Liberal procurement regime restricts arhtiyas’ role

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Published on Jan 30, 2020 11:09 PM IST
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Hindustan Times, Chandigarh | ByGurpreet Singh Nibber, Chandigarh

With change in rules following the amendments made in the Agricultural Produce Market Committee (APMC) Act, farmer groups will now be able to sell their produce to the buyer of their choice. Also, this will also open door to private players in the food grain procurement business in Punjab.

Under the new rules, the role of arhtiyas (commission agents) has been restricted as now they can pay farmers for the purchases they make only by transferring money electronically and not through cheque, draft, cash or any other mode.In case an arhtiya fails to do this within a fixed time frame, there is provision of penalty and even attachment of property.

Secretary, agriculture, KS Pannu said the rules were notified after amendment in the APMC Act in 2017 and mandatory Public Finance Management System (PFMS) for making payment to the farmers. “The liberal system will lead to empowerment of farmers by way of direct payment and also gives him more choice of buyers. It will also cut down usurious non-institutional loans burden on the agrarian community,” he said.

It is to be seen how the rules are implemented but they give farmers an upper hand, minimising chances of getting exploited at the hands of the arhtiyas. The commission agents, numbering about 22,000 in Punjab, have been playing a pivotal role in the food grain procurement business since the minimum support price was introduced in early 1960s.

The amendments were effected by state’s agriculture department on a demand by food and civil supplies department, following directions from Centre’s consumer affairs, food and public distribution ministry to credit crop payment directly into the farmers’ account through PFMS and not through arhtiyas.

The Centre has told Punjab that there will no extension to follow the directions beyond rabi (wheat) crop for which procurement begins on April 1. The arhtiyas will get 2.5% of the crop value cleaning of the grain and other mandi activities.

The new rules make it mandatory to furnish details of payments made to farmers on the J-form, putting an end to the benami trade.

Former head of economics department Punjabi University Lakhwinder Singh Gill, who is director of Centre for Development Economics and Innovation Studies, said: :It’s just a beginning and there should be direct payment to farmers which could only be possible when arhtiyas are totally out of the picture. The procurement agency should directly pay to the farmers.”



Private companies can set up mandis parallel to the 1,800 market yards being managed by the state Mandi board. Private mandis will come up on land not less than 10 acres.

Interested private players will get one common licence to procure all farm produce anywhere in the state. Earlier, they would need a separate licence for doing business in each mandi. Multinational companies, including Indian Tobacco Company (ITC) Ltd., are in the queue to get statewide licences.

A group of farmers can also set up mandis and sell the produce in open market from where consumers can buy directly from the farmers.

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