Why a section of arhtiyas is against new payment system
CHANDIGARH: The Centre is seeking details of transfer of payments to the farmers’ accounts for the first time since procurement of foodgrains by government agencies began in the country in the early sixties, a move which has caused disquiet among a section of arhtiyas (commission agents) as well as farming community. HT looks at the issue.
THE NEW SYSTEM
The public finance management system (PFMS), an online transaction platform, will supposedly streamline payment of minimum support price (MSP) to 15 lakh farmers in Punjab. The objective of the system is to link the financial network of central and state agencies. The PFMS is linked to banks to get real-time reporting of banking transactions and for making e-payment of subsidies and other benefits under direct benefit transfer (DBT). Details of nearly 15 lakh Punjab farmers’ accounts have been sent to the central government.
COMMISSION AGENTS’ GROUSE
Before PFMS was implemented, the commission agents used to get the MSP payment and then would pass on the money to farmers after deducting their dues from them. Now, the farmers will get the MSP directly into their accounts and further pay dues to the arhtiyas. “They have got us into a situation wherein we will be making recoveries from farmers,” says RS Cheema, who heads a union of arhtiyas in Punjab. The Food Corporation of India (FCI) has wrongly included MSP though it was not the mandate of Centre, he claims. “Procurement is a state subject and interference by the Centre doesn’t go down well with arhtiyas who fear being pushed out of business as they are trying to establish a direct link with farmers. The 2.5% of total cash credit limit (CCL) arhtiyas get for supporting the farmers during procurement is a major incentive for them,” he says.
STREAMLINING PROCESS
By introducing the new system for disbursal of MSP to farmers, the Centre, which releases funds for procurement in form of cash credit limit (CCL), wants to ensure that every single penny reaches the end beneficiary – farmer. “Anyone who gives money has the right to maintain an account and same is the case with the Centre,” said principal secretary (food and civil supplies Punjab) KAP Sinha. The state government has decided to implement the system from the current kharif season.
WHAT FARMERS SAY
BS Rajewal, who heads a faction of the Bharatiya Kisan Union (BKU), says by pushing commission agents out of business the Centre wants to put an end to Punjab’s well-established mandi system. “Now, the corporate houses and private players will enter the market for foodgrain procurement, leading to crash of prices. It will sound a death knell for farmers. The promise of direct payment to farmers is actually a step towards ending the MSP regime,” he claims.
WHAT’S AT STAKE FOR STATE GOVT
The Punjab government is caught in a catch-22 situation. On the one hand are arhtiyas who are a strong support system that oils the political machinery in financial terms, on the other are farmers who comprise a sizeable vote bank. The government wants to keep both in good humour but can’t refuse to implement the PFMS as it has started deducting a portion of CCL amount given for procurement. Last year, ₹1,400 crore was deducted for not implementing PFMS and ₹26,500 crore was released in CCL only after the state started the process to implement the PFMS.
THE WAY FORWARD
The state government has assured the arhtiyas that it will not let them get out of business. “For this, the Agricultural Produce Market Committee (APMC) Act, will have to be amended but we have no such intention,” said a senior food and civil supplies department official, asking the arhtiyas to implement PFMS in letter and spirit.
He adds that they have to devise new methods for recoveries from farmers. Speaking about farmers he said their worry has no basis. The state government has imparted training to the commission agents to implement the system.