Punjab government agrees to transfer cash directly to farmers’ bank account

The Punjab government on Thursday agreed to transfer the Minimum Support Price (MSP) to bank accounts of farmers instead of ‘Arhtiyas’ accounts. This will start from the current Rabi Marketing Season (RMS) which is due to start in Punjab from Saturday.

According to Food and Public Distribution Secretary to Government of India Sudhanshu, “The MSP given to farmers shall be paid directly to their bank accounts on the basis of physical document of the land duly counter signed by either Patwari or Sarpanch of the village. In six months, the land record will also be integrated online.” With this, the MSP payment to farmers across the country will become online.

The decision came at a meeting chaired by India’s Food Minister Piyush Goyal which was attended by four ministers from Punjab, including finance and food ministers. It was also decided that the Arhtiyas will continue to get their commission of 2.5% separately.

“The Centre refused to budge on the direct cash transfer issue and insisted that Punjab will have to transfer money directly to the farmers within 48 hours. Else, they said, they (the Centre) will not procure from Punjab,” said Punjab finance minister Manpreet Singh Badal.

Punjab has been demanding exemption from direct payment and wanted the Arhtiyas to continue to play a role.

Minimum Support Price (MSP) is set to ensure guaranteed prices and assured markets to the farmers. The MSP-based procurement system is aimed to save the crops from price fluctuations due to various unwarranted factors such as the monsoon, lack of market integration, and other elements that can influence Indian agriculture.

The MSP is fixed twice a year on the recommendations of the Commission for Agricultural Costs and Prices (CACP), which is a statutory body and submits separate reports recommending prices for Kharif and Rabi seasons.

Arhtiyas or ‘middlemen’ facilitates the transaction between farmers and the actual buyers. The buyer can be a private trader, a processor, an exporter, or a government agency like the Food Corporation of India (FCI).