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The direct fall-out of not implementing farm laws: Punjab Farmers say Arhtiyas asking for signed blank cheques for helping in crop procurement

Had Punjab implemented the farm laws, the farmers in Punjab would not be dependent on the middlemen (Arhtiyas) to sell their produce and therefore, would not getting blackmailed and harassed.

Farmers in Punjab have alleged that Arhtiyas or the commission agents are now demanding “signed blank cheques” for facilitating procurement, a report published in the Indian Express said.

A farmer named Nihal Singh from Bathinda’s Baluana village was taken aback when he was asked to provide a signed blank cheque from his Arhtiya. Singh alleged he was asked to furnish the cheque to the Arhtiyas against payment of a loan of Rs 2 lakhs taken two years ago.

Though the farmer had been diligently paying periodic instalments to the arhtiya for the past four cropping season and has, so far, paid an amount equal to the principal, he was still asked to submit a blank cheque citing the outstanding interest amount of Rs 1 lakh. This demand meant that Nihal had to push harvesting his crop till deciding whether to provide the signed cheque or not.

“I promised him that I will soon clear his entire debt, but he is not willing to trust me and asked me to give a signed blank cheque as a guarantee against the outstanding amount. He says if I don’t give him the blank cheque, he won’t auction my produce in the mandi. But, I am yet to take a final decision on it,” Singh lamented.

Nihal is the not only one who is suffering from this predicament. Farmers across the state, be it Jalandhar, Khanna, Faridkot, Sangrur or Mansa, have pointed out that similar demands are being made of them by their arhtiyas.

Another farmer, Jagtar Singh of village Ganga Nathana is facing a similar crisis. After having harvested his crop on 7 acres of land, his arhtiya informed him that his crops would only get auctioned when he furnishes a signed blank cheque. Jagtar had borrowed Rs 3 lakh from his arhtiyas for the marriage of his daughter four years back and has been paying money in instalments at the time of procurement.

Similarly, other farmers in Punjab also have similar stories to tell. They claim that their arhtiyas too have asked them to provide signed blank cheques before bringing their crops to the mandi.

Jagsir Singh, farmer leader of BKU(Ugrahan) from Bathinda, acknowledged the new development, stating that several farmer leaders have informed him that their arhtiyas are asking for signed blank cheques from them. Besides cheques, they are asked to furnish their Aadhaar cards in some cases.

Jagsir said they have temporarily stopped arhtiyas from doing so and asked them to wait till the time their senior leaders take a decision on the issue. The arhtiyas, he added, are worried that farmers won’t pay them their pay money back after getting direct payment from the government.

An arhtiya from Khanna Mandi said the signed blank cheques are sought from farmers as security. He said both arhtiyas and farmers know that during every procurement season only a pre-decided amount gets deducted.

Defending the move by arhtiyas, Ravinder Singh Cheema, the president of the Arhtiya Association Punjab, said that arhtiyas pay farmers whenever they need money, and then the farmers pay arhtiyas back during procurement season, adding that only this cycle was being followed.

Farmers in Punjab are used to taking high-interest loans from arhtiyas who auction their produce in the mandis. They pay their loan amount back in instalments in the form of deduction in payment for procurement. The Direct Benefit Transfer has created an imbalance in the non-banking loan system in Punjab. The arhtiyas are apprehensive that the farmers would stop paying their dues once they start receiving amount directly in their bank accounts by the government. To protect themselves from loan default, they have started asking for signed blank cheques from the farmers.

A direct fall out of Punjab not implementing the farm laws

One of the biggest factors plaguing the growth of agriculture sector in the country is the inability of the farmer to find a market and to get a fair price to his produce. To address the issue, the erstwhile governments of different states enacted the Agricultural Produce Market Regulation Acts (APMC Acts), which authorised them to set up and regulate marketing practices in wholesale markets. 

The objective of these markets was to ensure that farmers get a fair price for their produce. However, with each passing year, the APMCs turned out to be inefficient with increasing cartelisation of middlemen, ban on private players to enter the trade, increasing corruption etc. 

The Modi government recently introduced three bills to promote much easier trade for the farm produce and to provide a competitive market for the producers outside the existing APMC system. The three laws were

  1. The Farming Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020: This law aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition
  2. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020: This law relates a framework for contract farming through an agreement between a farmer and a buyer prior to the production or rearing of any farm produce. 
  3. The Essential Commodities (Amendment) Bill, 2020: This law aims to regulate the supply of certain food items only under extraordinary circumstances.

Had Punjab implemented the farm laws, the farmers in Punjab would not be dependent on the middlemen (Arhtiyas) to sell their produce and therefore, would not getting blackmailed and harassed.

Arhtiyas call for strike against the state government’s decision to implement the DBT system

Earlier this month, Arhtiyas went on strike protesting against the state government’s decision to implement the direct payment system to farmers, bypassing the Arhtiyas. Even though the Punjab government agreed to the Direct Benefit Transfer (DBT) to farmers against the purchase of foodgrains, the farmers and middlemen in the state were not ready to abandon their existing system.

While the purchase of food grains by the state procurement agencies for the Rabi harvesting session was to start from today, it was blocked by protestors at several places in Punjab. Not a single truck of wheat arrived at Asia’s largest grain market in Khanna in Ludhinana, as farmers stayed away from it. Labourer unions and arhtiyas (commission agents) staged a strike against the scheme of direct payment to the farmers, in ‘support’ of the farmers.

However, hours after the Arhtiyas (commission agents) in Punjab had launched a strike and blocked the purchase of food grains from farmers at mandis, the strike was called off after CM Amarinder Singh held a meeting with them. The Arhtiyas withdrew the strike after the CM assured them that they will remain an integral part of the food grain procurement system.


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