Deadlock over Punjab wheat purchases as Centre, state spar

April 7, 2021 4:45 AM

Even though official purchase of wheat from Punjab for the current rabi season is slated to start from April 10, the deadlock over the means to transfer the amount – estimated at close to Rs 26,000 crore – to farmers remained unresolved even on Tuesday.

PaddyOfficial agencies like FCI purchase about a third of the wheat they procure in a winter season from Punjab.

By Prabhudatta Mishra

Even though official purchase of wheat from Punjab for the current rabi season is slated to start from April 10, the deadlock over the means to transfer the amount – estimated at close to Rs 26,000 crore – to farmers remained unresolved even on Tuesday.

While state government of Punjab, the hotbed of farmers’ agitation against the three contentious laws governing marketing of agricultural produce, insist that the payments be made through arhatiyas (commission agents) as has been the conventional practice in the state, the Centre wants Punjab, like other states, to shift to the new system of direct transfer of the funds to the farmers’ bank accounts.

The direct transfer system has been rolled out in phases since 2018 and as of now, almost all states follow it. Starting this procurement season, Haryana, which neighbours Punjab, and where the ongoing farmers’ protest gets a lot of support from, will also switch to direct transfer system for making payments to farmers.

Official agencies like FCI purchase about a third of the wheat they procure in a winter season from Punjab.

“Our chief minister (Captain Amarinder Singh) will meet prime minister Narendra Modi soon to discuss the issue. We are hopeful of a solution before the procurement starts,” Punjab’s food minister Bharat Bhushan Ashu told FE. Though no confirmation has come from the prime minister to a meeting request of the chief minister, it will be held soon, said Ashu, who is also likely to accompany Singh to the meeting with the prime minister.

The Centre last month approved a request of the Punjab government for rescheduling wheat procurement due to late maturity of crop and a surge in Covid-19 cases in the state. The procurement will now begin from April 10 and continue til May 31, while the earlier plan was to undertake it between April 1 and May 25.

Punjab is yet to have a mechanism for direct transfer of payment to bank accounts of farmers, including the lessee farmers and sharecroppers. On the other hand, acceding to a directive from the Centre, Haryana has made elaborate arrangements with the Food Corporation of India (FCI) for purchases of wheat at MSP. Farmers of Haryana have been registered through an on-line portal created for the procurement and payment will be transferred to their bank accounts.

In a letter to Singh, dated March 27, Union minister for food and public distribution Piyush Goyal mentioned that the Centre has been requesting the state to streamline procurement and payment procedure in line with guidelines on direct online payment to farmers and in compliance with Public Finance Management System (PFMS) since 2018. The Centre has been giving exemptions to Punjab on this during last three seasons, Goyal pointed out.

Goyal also said that suitable IT infrastructure has not been put in place by the Punjab government for integrating the land records with e-procurement portal. Requesting personal attention of the chief minister on the issue, Goyal had sought “cooperation in implementing Government of India’s policy towards online payment directly into farmers’ account and compliance of PFMS”.

In the current season, the wheat procurement target in Punjab has been set at 130 lakh tonne against 127.14 lakh tonne bought last year. Though the MSP value of last year’s procurement was `24,474 crore (at `1,925/quintal), the FCI had to pay market fee (3%), rural development cess (3%) and arhatiya commission (2.5%) extra, which was estimated to be around `2,080 crore. The Centre has agreed for continuation of arhatiya commission, but shifted from payment of a percentage of MSP to a fixed amount from last year.

In view of a record wheat production of 109.24 million tonne in the country during 2020-21 crop year (July-June), the government has also set a target to buy 42.74 million tonne for the central pool, which is nearly 10% more than actual quantity purchased last year. Wheat procurement in the country begins from April 1 every year and in two months the entire operation concludes.

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