Meet the Middlemen behind Farmers? Protest

Farmers’ protests were really never about farmers, but more about Arhatiyas, local moneylenders, and large farmers, who thrive on the insecurities of small farmers. They are nothing more than commission agents.

For centuries, India has been an agrarian economy and rightly so as it is the most important Indian economy sector accounting for 18 per cent of India’s GDP and providing employment to 50 per cent of the country’s workforce. Well, the picture has changed. post-2004, India has become a non-farm economy, in accordance with economist Ramesh Chand and his research paper for the Niti Aayog.

As per the last agricultural census, of 14.57 crore agricultural holdings in the country, 12.56 crore (86.21 per cent) are small and marginal holdings (less than 5 acres), representing 47 per cent of the total operated agricultural area, against less than 1 per cent in large holdings of 10 hectares and above. Agriculture is the means of support for half a billion people and creates an approximate monthly income of Rs 6,000—we reckon Rs 50 per person per day for a family of four. This is the most vulnerable section which has been long marginalised and even more so, post-Independence but that indeed is a point of rumination for some other time.

Among the marginalised and small farmers, 62 per cent are in Southern, Eastern and Northeast Indian states, the highest being in Uttar Pradesh (15 per cent, mostly in eastern UP) followed by Bihar (11 per cent). The lowest number of farmers under this category has been reported in Punjab and Haryana, only 1 per cent. Since its inception, what became ‘food for thought for everyone, is that farmers from the states of Haryana and Punjab were at the forefront of this agitation. Later, farmers from Western Uttar Pradesh also joined the protests. Today, we dig deeper to unravel the truth behind the incessant and ongoing farmers’ protest. It’s been over six months now since the commencement of the farmers protest, but nothing other than chaos has been caused.

Most farmers, owing less than 5 acres of land, have been depending on Arhatiyas, big farmers or local moneylenders for earning their daily bread. These small farmers take loans from commission agents at burdensome interest rates in the hope of returning on time. But they mostly end up being caged under their debt. In states like Punjab and Haryana, agricultural land is predominantly held by large farmers, having more than 2 hectares (or 5 acres) of land. The commission agents are majorly active in the state of Punjab and Haryana. There are estimated to be around 48,000 Arhatiyas in Punjab. These are also mostly moneylenders who lend farmers at exorbitant interest rates, ranging between 18 to 24 per cent. Politicians from Haryana and Punjab control agricultural marketing by becoming members of the Mandis, forming a strong network with the Arhatiyas, profiting millions. It is not concealed that Arhatiyas, large farmers and local moneylenders, have been majorly responsible for the suicides of farmers in Punjab. In fact, in 2018, it was estimated that farmers in Punjab owe over Rs. 80,000 crore to various banks and private money lenders. This very lobby of commission agents, including large farmers, Arhatiyas and politicians, is condescending the agitation in the name of poor farmers to protect their Mandis, which are the hotbeds of corruption, monopoly, and politics what not.

For those who remember, back in the 1990s, when the then PV Narasimha Rao coalition had first announced India’s liberalisation, protests far greater had broken out. People were scared and uncertain. Two decades in, we see India’s incredible success story as a result of those policies. The farm reform bills are precisely one such step in the same direction. Everyone from economists to the International Monetary Fund (IMF), World Bank, and many such multilateral agencies have been all praise for the new reforms and warned about the pressure that the centre would face, and we now know why!

Ashok Gulati, an agriculture expert and Infosys Chair professor for agriculture, remarked, “Yes, what would certainly come under pressure is the high commission of Arhatiyas, Mandi fees and cess that states collect, which account for as much as 8.5 per cent over the MSP in Punjab, amounting to roughly Rs 4,500 to Rs 5,000 crore each year.” Worse still, his words were echoed even by Surjit Bhalla, a renowned economist, who recently made an innocuous but terse comment asking us to “Be honest” in an editorial. He remarked, dimly enough, “The intellectual gymnastics played by many learned people defending the farmer protests is so shocking.”

The new legislation will majorly impact influential commission agents in ‘Mandis’ and the politicians deeply rooted in this old system don’t want their grip to be taken over by farmers. The laws free up farmers from the clutches of Arhatiyas and give them the power to sell their produce to anyone they want. They can sell it at factories, warehouses, silos and cold storages, thus expunging intermediaries resulting in full realisation of the price for the farm produce. It’s no surprise that the opposition towards farm laws has been the highest in Punjab and Haryana because less than 1 per cent of small farmers occupy agricultural land in these states, percentage cut in Mandi taxes, and other levies in double digits.

Not just political manifestos of previous non-NDA Governments but also several studies of agricultural/social scientists, farmers and industry proponents have evangelised the same farm reforms that they now protest. Is it political convenience, or is it the case of the NDA stealing their thunder? Well, this much is clear now. In fact, private traders will need to provide farmers more benefits to allure them, like security, lower rate of interest, etc., to attract farmers. These reforms are the best method to increase the income of small farmers, owners of less than 5 acres of land. This competition might persuade the Mandis to shed malpractices like price-fixing and reduce their charges, which is why commission agents fear the new farm reforms. This is the gold standard for a litmus test. Those who claim to be pro-farmers and bash the centre for all the wrong reasons should answer how can they claim to be pro-farmer if they support middlemen and commission agents. News agency PTI reported that currently, wheat procurement is in full swing in Punjab, Haryana and Uttar Pradesh. “About Rs 8,180 crore has already been transferred directly into Punjab farmers’ account,” the Union Food Ministry said in a statement. About 84.15 lakh tonne of wheat has been procured from Punjab so far in the ongoing 2021-22 rabi marketing season (April-March), it said. In Haryana also, the MSP payment is being paid directly into the bank accounts of farmers. So far, Rs 4,668 crore has been transferred, it added. About 71.76 lakh tonne of wheat has been procured from Haryana. Procurement of Wheat is being undertaken by the central nodal agency Food Corporation of India (FCI) and state agencies. According to the latest data, a total of 222.33 lakh tonne of wheat has been purchased up to April 25 by these agencies across the country in the current marketing season.

Punjab and Haryana are the top two states leading in wheat procurement so far. The third state is Madhya Pradesh, where 51.57 lakh tonne has been purchased so far. “About 21.17 lakh wheat farmers have already benefited from the ongoing procurement operations with MSP value of about Rs 43,912 crore,” the ministry said.

The laws free up farmers from the clutches of Arhatiyas and give them the power to sell their produce to sell it at factories, warehouses, silos and cold storages, thus expunging intermediaries resulting in full realisation of the price for the farm produce. It’s no surprise that the opposition towards farm laws has been the highest in Punjab and Haryana because less than 1 percent of small farmers occupy agricultural land in these states

“Direct payment of MSP is being rejoiced by the farmers of Punjab/Haryana as for the first time they are receiving direct benefits against the sale of their hard toiled crops without any delay…” it added.

Therefore, these groups want to safeguard their monopoly, portraying farmers at the front of these protests, but fortunately, the Central Government has backed down due to the political and international pressure. The consistent efforts of the Central Government to implement the new laws remind one of the famous quote, “Where there is a will, there is a way,” but the strong network of commission agents and protests driven by large farmers will apply full force to safeguard their monopoly. This truth is hiding in plain sight but needs a little introspection keeping personal biases aside.

The commission agents and farmer unions, which consist of large farmers, have successfully garnered support on social media, blocked the Singhu border for months now, created ruckus in the capital. If small farmers have legitimate concerns, their grievances should be heard, but without being hostage to large farmers in Punjab, Haryana and pockets of Western Uttar Pradesh. This remains my fervent hope and desire. The question remains, how long are we going to tolerate these protests that stop benefitting small farmers, who are most impacted by the bills? If we extend tolerance to the intolerant, tolerance is all but destroyed.