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One in three farmers in Punjab are absentee landlords, MSPs paid to middleman through DBT: Here is how Punjab farmers play by different rules than rest of country

Unlike the rest of the country where farmers are direct beneficiaries of MSPs through Direct Benefit Transfer scheme, in Punjab, it passes through intermediaries.

Even as ‘farmers protests’ rage around the highway entrances to Delhi, causing inconvenience to the common man, more details are emerging out that shed light on how the farmers in Punjab play by different rules, especially in procurement and Direct Benefit Transfers than the rest of the country.

Amidst the debate over the credibility of such ‘farmer’ protests, interesting details about the extent of absentee landlordism in Punjab and its influence on the ongoing protests have come out. A report by Indian Express has revealed that at least 30-35% of Punjab’s farmers who cultivate land do not actually have any lands, but do farming in lands that belong to government employees, NRIs and permanent urban residents within and outside the state.

The report also cites one farmer named Balwant Singh Boparai, who has been cultivating in 10 acres in Ghudani Kalan village of Payal tehsil in Punjab’s Ludhiana district. The 58-year-old does not own the land, but cultivates on rented land at an annual rate of Rs 55,000-60,000 per acre. Interestingly, there is no record in any official document of his cultivating this land or its owner having given it out on lease. Boparai states that the land belongs to an NRI (non-resident Indian) based in Canada.

According to the prevailing rules to obtain institutional loans, insurance or even subsidies for that matter, one should be a registered farmer in any part of the country. Not being either the owner or a registered tenant farmer will not allow accessing any crop credit from the local primary agricultural cooperative society, loan waiver schemes or the Centre’s Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) income support schemes.

Quoting Boparai, the report states that middlemen (arhatiyas) get the money to their account after the Food Corporation of India and state agencies undertake grain procurement in APMC mandis, which is then distributed to landless tenant farmers like Boparai after deducting the commission.

“Yes, the payment is made into the arhatiya’s account. But that money also comes to us. Moreover, he (arhatiya) is the one who is also giving us loans to raise our crop. If the government now starts transferring MSP money to the zamindar, what will happen to us?,” the report adds quoting Boparai.

Another tenant farmer, Jagjit Singh, who cultivates five out of the 15 acres owned by a zamindar of Jhumba village in Bathinda district and tehsil, said, “Whenever I take my crop to the mandi, the arhatiya makes sure that the J-form is filled not in my name. And he pays me after deducting interest and loans that I have taken from him”.

“Where will I go if the government pays only the zamindar and the arhatiya loses interest in giving me loan that he cannot recover from sale of crop to him?,” asks Singh, who has paid Rs 60,000 per acre for growing paddy and wheat this year.

“I pay 50% of the rent amount in April (ahead of the paddy season) and the balance 50% in September (before sowing wheat),” adds Singh, who have been cultivating the land rented from the same zamindar who has also rented his land to three other tenants for the last 15 years.

Ravinder Singh Gill, the sarpanch of Mehmuwal Yusufpur village in Jalandhar district’s Shahkot tehsil cultivates about 70 acres. Like Boparai and Singh, he too does not own the land that belongs to two NRIs, one living in Canada and the other in the United Kingdom.

“Whatever land you can call my own is too small. The 70 acres, on which I grow wheat, paddy and potato, is not in my name. So, I can neither avail any crop loan nor receive government benefit against this land,” Gill says.

In Punjab, MSPs through DBTs are transferred through intermediaries

Another interesting fact is, unlike the rest of the country where farmers are direct beneficiaries of MSPs through Direct Benefit Transfer scheme, in Punjab, it passes through intermediaries.

Under the current system in Punjab, the Food Corporation of India and state agencies procure the grains from arhatiyas and deposit the MSPs through DBT into their account. Arhatiyas, taking the outstanding loans, commission into account, settles farmers share out of the total transfers he received on behalf of the farmer.

Reportedly, Punjab has some 48,000 of these mandi intermediaries, of which 28,000-odd are active, who deals anywhere from 20 to 200 farmers.

The Punjab government has now made it compulsory for Arhatiyas to provide bank and Aadhaar numbers of all their farmers. The bank accounts of the farmers will be linked to the Centre’s Public Financial Management System (PFMS) network, which will enable direct payment of MSP monies into the accounts of farmers rather than that of the arhatiyas.

The move has predictably met with opposition from the arhatiyas, who had announced state-wide protests in March. It is reported that the current protests are also allegedly fuelled by these Arhatiyas, who fear of losing their existing hegemony in procurement process. The three farm laws passed by the Modi government aims to bypass these intermediaries in the procurement process.

The recent move by the Modi government to make minimum support price (MSP) payments directly into the bank accounts of farmers, from the ensuing wheat procurement season starting April has caused discomfort to both farmers and Arhatiyas.

The farmers, majority of them are tenant farmers fear that the money would be deposited into the account of absentee landlords. The direct transfer to farmers also disrupts the existing nexus of Arhatiyas, who will lose out big as he/she cannot arbitrarily avail commission fees and also high-interest rates for the loan availed to small farmers.

Punjab farmers – a major cause of air pollution, water level depletion

The Punjab farmers, one of the primary beneficiaries of Green Revolution in the 1960s, are also one of the major reasons for the rising air pollution in North India, especially during the winters.

In recent years, Punjab has recorded the highest number of incidents of stubble burning among the northern states. The incidents of crop burning in Haryana and Uttar Pradesh have drastically come down but Punjab has seen a marked increase in the number of stubble burning incidents that contributed to the exacerbating pollution in the Delhi-NCR region.

Even though the Supreme Court had rapped the state governments on the growing number of stubble incidents, advising them to incentivise the farmers to give up burning the residual, the Congress government in the state has conspicuously failed in stopping the farmers from doing the same.

As per data released by the Punjab Remote Sensing Centre, the State witnessed 73,883 incidents of stubble burning between September 21 and November 14, which is the highest since 2016. In 2019, Punjab had reported 51,048 cases of stubble burning and 46,559 such incidents in 2018.

It is interesting to note that in several other states, stubble is harvested by farmers, which is used as fodder for livestock during monsoons when the grazing lands are farmers. But it is claimed that stubble in Punjab is not suitable for for animals, and hence the farmers are forced to burn it.

Depleting groundwater a menace of equal proportion as stubble burning

Not just stubble burning, Punjab is also racked by the menace of depleting water reserves. The groundwater resources of Punjab also paints an alarming picture as agriculture experts in the state have expressed shock and worry over the diminishing water indices from the state. A report published in January 2020 points out how Punjab will have a net groundwater availability of -14.58 billion cubic metre (BCM) within the next 25 years and even the domestic and industrial water supply will reduce by 1.22 BCM.

An eminent agriculture expert Sucha Singh Gill of IIM, Ahmedabad, said that while Punjab had a net ground water availability of only 21.58 BCM, it was consuming at much higher levels of 36 BCM. A latest government report on Punjab’s groundwater resources observes that the groundwater pumpage has increased from 149% (of naturally available recharge) in 2013 to 165% in 2018. It also holds the distinction of being the state with the maximum percentage of wells showing groundwater depletion among all states in India.

A report tabled in Rajya Sabha a couple of months ago by the Department of Water Resources, River Development and Ganga Rejuvenation stated that 79 per cent of the assessment units showed the annual groundwater extraction in Punjab was more than the assessed annual extractable groundwater resource. In 2019, it was 76 per cent.

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