Who are Arhtiyas and why are they supporting the ongoing farmers' protest against the Farm Laws 2020?
Arhtiyas in the Indian State of Punjab have decided to shut down all the grain markets in the state from 22-25 December 2020 to express resentment over the Income Tax raids.
As quoted by Times of India, Federation of Arhtiyas Punjab President Vijay Kalra stated that they will shut down the grain markets in Punjab from Tuesday to Friday in protest. They do not want to shun the grain markets for an indefinite period as the cotton crop farmers will get harassed with the closure of Mandis. They demanded that the Income Tax officials must immediately return all the documents and books of Arhtiyas.
While accusing the Centre of adopting intimidatory tactics against Arhtiyas, Punjab Chief Minister Amarinder Singh questioned, "What is this if not a clear case of vendetta politics by the Centre, which is hell-bent on demolishing the farmers’ protest by hook or by crook?”
He further stated that these actions of the Central Government do not augur well for the world’s largest democracy.
Raid on Arhtiyas
The Income Tax raids were conducted at the premises of big Arhtiyas of Punjab within four days of issuing notices, without waiting for responses to the notices. Even the local police were not informed and instead, the CRPF was involved to provide security during the raids conducted by the Income Tax officials.
Around 16 Arhtiyas have been served Income Tax notices. Raids were carried out on six Arhtiyas, having state-level designations in their unions. There are around 28,000 licensed commission agents in Punjab.
As per leaders of different unions, Arhtiyas are standing shoulder-to-shoulder with farmers in their ongoing protest against the Farm Laws 2020 and the raids were an attempt to divide the farmer and arhtiya unity to sabotage this movement.
Who are Arhtiyas?
Arhtiyas or often referred to as 'bichauliya' or 'middlemen', facilitates the transaction between farmers and the actual buyers, making them more akin to a broker. The buyer can be a private trader, a processor, an exporter, or a government agency like the Food Corporation of India (FCI).
Arhtiyas also finances the farmers. The income of an Arhtiya is dependent on the quantity and value of produce routed through him, aligning his interest with that of the farmer.
Why have Arhtiyas joined the farmers' agitation?
The Arhtiyas fear that the Farmers' Produce, Trade, and Commerce (Promotion and Facilitation) Act introduced by the Centre will eventually lead them suffering losses to the tune of Rs. 1800 crore annually in commission.
The Arhtiya Associations of Punjab have condemned the new Farm Laws 2020 citing them as a 'death warrant' for the Arhtiyas. They also apprehended that around seven lakh people will be rendered jobless by the said legislations.
Thus, they have been continuously supporting the farmers' agitation against the new agriculture reforms in the country.
What do Arhtiyas say?
“Tuhanu saadda 2.5% commission disda hai, par saadde kharche kisi nu ni disde,” Ajmer Singh Gill, an Arhtiya said as quoted by the Indian Express.
He further stated that he handled 58,875 quintals of paddy procured by state agencies recently at the rate of 2.5% commission on the paddy at MSP of Rs 1,888 per quintal. His commission came out to be 2.8 lakh.
He also facilitated 21,000 quintals of wheat purchases at the MSP of Rs 1,925 per quintal, in addition to 7,500 quintals of basmati paddy, 12,500 quintals of maize and 1,600 quintals of sunflower. The last three crops were bought by private players at average market rates of Rs 2,000, Rs 900 and Rs 4,000 per quintal, respectively. His aggregate commission from all these transactions came to be around Rs 46 lakh. Around 3.9 lakh commission came from the two government MSP-procured crops.
He explains that Rs. 46 lakh is not his income as it is inclusive of expenditures. Ajmer Singh Gill employs around 70 workers in April-May for paddy and October-November for wheat. These labourers unload the grain from the farmer’s tractor-trolley in front of the Arhtiya’s shop for auctioning, cleaning, packaging (filling the produce in bags, weighing and stitching) and finally loading of them onto trucks for despatch from the mandi. He also provides food and accommodation to these labourers, apart from salary.
It is to be noted that some of these costs are recovered from the farmers such as unloading and cleaning of grains and buyers such as packaging at the standard rates set by the Government. However, other expenses such as electricity units, cleaning of the machine, electronic weighing scales and tarpaulin covers are borne by the Arhtiyas.
Thus, as claimed by Ajmer Singh Gill, an Arhtiya earns only 1% out of 2.5%.
Harbans Singh Rosha, president of Khanna’s Arhtiya Association has 270 licensed Arhtiyas. Harbans explains that the buyers pay only after 3-4 months and sometimes do not even pay. Hence, he on his part cannot delay the payment to farmers beyond 48 hours.
He further warned the Central Government that his association will continue sending farmers, labourers and arhtiyas to the Singhu border until the Farm Laws 2020 are repealed which he belives weaken the mandi system and phases out MSP procurement.
To date, the association has sent around 50 buses and 80 personal vehicles carrying farmers, labourers and arhtiyas to the Singhu border.
Shekhar Pallela, a commission agent at the Guntur Mirchi Yard in Andhra Pradesh facilitate the sales of farmers' produce.
Shekhar explains that this APMC handles around 25-30% of the country's red chilli production. Approximately, 1.2 crore bags of roughly 45 kg each arrives at this mandi and at a rate of Rs. 6,300 per bag, the mandi does a business of Rs. 7,500 crore per year.
It is interesting to note that Guntur's Arhtiyas charge only 2% from the farmers, unlike Punjab and Haryana.
This year, the Government Agencies have procured around 202.78 lakh tonnes of non-basmati paddy from Punjab, against the state’s estimated 145 lakh tonnes output. This simply means that produce from other states has also been sold in Punjab's mandis.
Why there's a difference?
Andhra Pradesh's APMC levies only 1% market fee on the buyers while Punjab's APMC levy 3% cess for wheat and paddy and a separate 3% Rural Development cess of the State government. In Haryana, 2% each is levied.
Also, 1% market fee in Guntur generates around Rs. 75 crore annually on a high-value crop. The fee is not high to divert trade away from the mandi. Also, the market yard at Andhra Pradesh's Guntur has 400-odd commission agents and 250 registered buyers, ensuring liquidity in the mandi. Farmers from other regions also sell their produce in Guntur.
The major issue with big corporate firms is that they cannot pay farmers in cash. Only commission agents could provide the farmers with cash payment.
As we know, Agriculture in India is a State Subject, the condition of farmers and arhtiyas vary from one state to another. Thus, a difference in opinion is witnessed over the new Farm Laws 2020.