The arhityas' (commission agents) "small" cut for selling crop is big blow to the agrarian economy of the agricultural state, NABARD has found out.
The 19,000 arhityas in the state earned more than `9,000 crore in 22 years for doing nothing practically in the mandis (grain markets) to facilitate farmers, suggests the National Bank for Agriculture and Rural Development (NABARD) study done from 1990 to 2013.
Since 1990, Punjab's farmers have fallen into more debt because of the rising input cost but the arhityas have taken their commission to 10 times (from almost `100 crore to more than `1,000 crore a year), economists have observed.
Green Revolution and research increased Punjab's agricultural output no doubt but because of the "very strong lobby of arhityas in the state", commission agents reaped the maximum benefit, suggests the study.
From 1990 to 1998, their commission was 2% of the selling price. Then it was raised to 2.50%. The commission collected in 2012 exceeded `500 crore for paddy; `400 crore for wheat and 37 crore for cotton. Nearly 32,000 arhityas registered with the government but only 19,000 are working.
"It's an irony that in India, a strong lobby is earning crores or rupees for doing nothing. The arhityas' claim that they facilitate farmers is baseless. For the facilities in the mandis, farmers even pay 1% market fee to the state mandi board," said senior economist Sukhpal Singh, who led the study.
"If the arhityas' fee was pumped into farming, the state would have been more prosperous," said Kesar Singh Bhangu, agricultural economist of Punjabi University in Patiala. "Punjab's farm debt is `35,000 crore, while in 22 years, the arhtiyas have earned more than `9,000 crore," he added.
The arhityas' actual income from farmers is at least 20 times.
"If the arhityas' fee was pumped into farming, the state would have been more prosperous," said Kesar Singh Bhangu, agricultural economist of Punjabi University in Patiala. "Punjab's farm debt is `35,000 crore, while in 22 years, the arhtiyas have earned more than `9,000 crore," he added.
The arhityas' actual income from farmers is at least 20 times.
Trap and sell
Arhityas also earn through interlinked businesses such as paying advance to farmers to bring them into debt trap. Realising they have a loan to repay, the farmers also fall for buying pesticides and other input material, because now they must have good crop," said Bharti Kisan Union (Ekta-Ugrahan) general secretary Sukhdev Singh Kokri Kalan. The 19,000 working commission agents also run 18,500 shops of pesticides, farm clothes and other inputs.
Payment direct, not easy
After pressure from farmers, the Punjab government first introduced direct payment to farmers from this paddy season, and then influenced by the prolific and rich lobby of arhityas, introduced tough riders that would keep farmers from using the scheme.
Farmers have to first register with the mandi board 45 days before the season. Again cheating the farmers, the government did not create any awareness about the clause. The advertisement appeared in newspapers on September 15, while the procurement season started on October 1.