In the last two decades (1989-90 to 2009-10) ‘arhtiyas’ – commission agents, a regular feature in Punjab agriculture system earned about Rs 6,427.27 crore on the marketing of all commodities, a study reports.

On an average, the commission turned out to be Rs. 306 crores per annum on all commodities since 1989-90, according to the study report authored by Sukhpal Singh and Tejinder K. Dhaliwal of Punjab Agriculture University.

The report also pointed out that commission agents charged a high rate of interest to the farmers of Punjab putting them in a debt trap. The study also criticised the commission system and said that the agents indulge in malpractices while weighing and pricing of the produce.

The study reports that such is the curse of arhtiyas that farmers remain bonded with the same agents. “The indebted farmers are not in a position to repay the whole amount of debt in a single season; this among other factors is the reason why the farmers remain bonded with the same commission agent,” the study concluded.

The study used a sample of 700 respondents, 300 commission agents and 400 farmers of different regions of Punjab. The study estimated that the total number of commission agent families is 20,232 in the state of Punjab.

The study noted that 35 per cent of the commission agents are Banias, about 27 per cent are Jats and 25 per cent are from the Khatri caste.

In a recent seminar on Agriculture, Punjab Mandi Board chairman Ajmer Singh Lakhowal also strongly hit out at the arhtiyas arrangement. Lakhowal stated that a farmer takes home only 16 per cent of the income from the produce.

The study suggested that food grain procurement payments should be made to farmers directly, rather than through agents.

However, in a recent move the Food Corporation of India (FCI) has decided to overall the payment system to farmers. On August 31, the FCI decided to make direct payment to farmers for their produce in the coming paddy lifting season to bring more transparency in procurement process.