Centre's farm sector initiatives face rough weather

In the farm sector, two initiatives by the Centre — e-trading of fruits and vegetables and the direct transfer of minimum support price (MSP) in grains — have seen little success, owing to strong resistance from commission agents and middlemen.

In many cases, even state governments have not been forthcoming in pushing the system, as revenue garnered through levying taxes on commission agents is expected to be lost when the new initiatives are put in place.

For Punjab and Haryana, the Food Corporation of India (FCI) today decided to continue with the current system of payment to farmers through commission agents.

In Punjab, which contributes most of the wheat to the central pool annually, a system to transfer the MSP to farmers had to be prematurely stopped during the paddy procurement season last year, following stiff resistance. This year, too, the system might meet the same fate, despite the Centre making the payment of MSP through cheques mandatory since April 1.

Punjab has about 1.5 million farmers who grow wheat. Transferring the MSP amount of Rs 1,285 per quintal directly to them would lead to corruption and inefficiency, claimed state officials. They said about two million people, who earn a sizeable chunk of their annual income in the April-May period, would be rendered jobless if the MSP was paid directly to the farmers. The number also includes around 26,000 commission agents.

“This is well-oiled machinery, which has been working for years and changing it overnight is not practical,” state officials said.

In Punjab, commission agents collect the grain from farmers, deposit it in Food Corporation of India godowns and collect the MSP on the behalf of farmers. They then hand over the money to the farmers, after deducting their commission charges.

A delegation of commission agents from Punjab met Union food minister K V Thomas, and urged that the system of direct transfer of MSP to farmers in the state be discontinued. Officials said the agents promised all farmers would be paid through account payee cheques by the commission agents.

Similar resistance was seen in Karnataka, where the government had planned to introduce e-trading of fruits and vegetables.

“What we have envisaged was farmers would show their produce online and buyers would then place orders and collect the produce from the farm gate,” officials said.

Shailendra Kumar, director of the National Centre for Cold Chain Development, said, “This would do away with the need to bring the produce to mandis and lead to reduction in wastage, as maximum wastage of perishable commodities takes place during the transportation.” He added despite the setback, the Centre was keen to convince states to adopt the e-trading model to solve the problem of wastage and cut down on middlemen and commission agents.

“We will put forward the proposal to all states, so that some sort of e-trading in perishable commodities is initiated,” he said.