Two days before it starts the mega exercise of procuring nearly 130 lakh tonnes of wheat crop, the Punjab government Thursday agreed to implement the direct bank transfer of MSP to farmers, bypassing the arhtiyas, from the current season saying it was left with “no choice” but to implement the scheme as Centre said it will not lift the grains if the new system was not followed.

The move is bound to create ripples among the farmers, the arhtiyas and the political class in the agrarian state, where the commission agents have traditionally been carrying out the procurement for the government agencies. Chief Minister Capt Amarinder Singh had earlier written to Centre, urging it to let Punjab carry on with the old system of procurement and payment through arhtiyas. In a meeting with the commission agents, he had refused to implement the new system that seeks to bypass the arhtiyas.

However, a five-member Punjab delegation that met Union Minister Piyush Goyal had to return empty handed Thursday with the Centre refusing to budge on the issue of direct benefit transfer (DBT) to farmers.

State Finance Minister Manpreet Singh Badal, who led the delegation, talking to The Indian Express said, “He told us to go back and follow the system. He told us either we follow the new system or they would not procure our crop. He said they will not budge”.

Besides Badal, Punjab Food Minister Bharat Bhushan Ashu, PWD Minister Vijay Inder Singla and Mandi Board Chairman Laal Singh attended the meeting. State Food Secretary KAP Sinha and senior officials from Union Food and Agriculture Ministries were also present.

Punjab procures wheat and paddy at the MSP for central pool under the National Food Security Act (NFSA). Currently, the payment to farmers in Punjab is done through arthiyas.

Manpreet said that the central government argued that the food stock procured belongs to it and the state government is just an agent and should make payment directly to farmers.

“We told him that we have our own APMC Act in place that provides for payment through the arhtiyas. He told us to amend the Act if we want our grains to be procured. He said they are the owners of the grains and we are just the agents and whenever an owner tells the agent to follow a system, it is to be done,” Manpreet said.

Ashu said that they told the Union Minister that the arhtiyas will not lift the grains if the money is given directly to the farmers. “To this, he said that if arhtiyas do not lift the grains, then the agencies would lift it directly.”

Manpreet said the state government has “no other choice” but to implement the DBT for farmers from the current season itself and a new mechanism will be worked out. “The Government of India (GoI) had asked us to implement the DBT for farmers. We had sought more time….But the GoI dismissed our demand. We tried a lot but they did not listen,” he said.

“It is a question of Rs 28,000 crore. We will hold a meeting with arhtiyas and work out how it is to be done,” he added.

The Punjab CM has called a meeting with ‘arthiyas’ on Friday to discuss about a new mechanism ahead of wheat procurement that will commence from April 10. “We will develop a mechanism that will give some protection to arthiyas,” Ashu said.

News agency PTI quoted Union Food Secretary Sudhanshu Pandey: “Punjab ministers in the meeting agreed to implement the DBT for farmers from this season. Currently, MSP payment is routed through arthiyas. We are asking them to pay directly to farmers.”

State governments were asked to implement DBT to farmers in 2018. By 2019, almost all states started implementing it except for Punjab, he said.

Manpreet said that Centre has agreed to defer implementation of land records integration (required to track land ownership of farmers during procurement) by six months. “They deferred the requirement for one more procurement season,” said Manpreet.

On the issue of pending rural development fund (RDF), the Centre told the Punjab delegation that they were not satisfied with the state’s reply. “We told him that this is our statutory fund and we have every record of how this money is spent and we are willing for an audit. He told us to send a detailed reply following which they will release our remaining 2 per cent of the fund,” said Manpreet.

The Centre had released only 1 per cent of RDF to state for the paddy procurement season while the state charges RDF at 3 per cent of the MSP. They Centre had sought a record on how the RDF was being spent.

On the issue of moving the stock from granaries in the state, Ashu said, “He told us they have devised a new system under which the grains would be lifted and sent directly to the states which were to be supplied with the grains”.

Manpreet said that the Centre had also agreed to pay Rs 1600 crore recoverable to Punjab, “They said they will clear this amount soon.”

The minister also informed the Centre that the state will implement the distribution of fortified rice via Public Distribution System and welfare schemes like Midday Meal Scheme.

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