How DBT prevented arhatiyas from economically exploiting farmers and rationalizing product supply-India News, Firstpost
The intention behind direct payments to farmers is not to bypass Arhatiyas but to improve the transparency of the process and provide the best options to farmers for their economic freedom.
Representative image. PTI
In the gloom surrounding every discussion of the Indian economy, what is ignored are the sustained efforts of farmers and the proactive policies of the government to ensure that India’s post-COVID rural economy is poised to grow at a fast pace. In recent months, the government has provided the country’s largest direct money transfer to Indian agriculture.
This reform is the most important factor that will stimulate the rural economy. Pumping thousands of crore directly into the pockets of farmers will have a significant impact on the consumption cycle, which in turn will create demand to jumpstart the economy. India’s rural economy constitutes over 46 percent of national income; nearly 70 percent of our population still lives in rural areas. Therefore, any increase in farmers’ income has the greatest impact on the Indian economy.
COVID-19[female[feminine has affected almost all sectors, the most affected are hotels and tourism. Only the rural economy has largely remained relatively insulated from the impact of economic disruptions induced by COVID. Due to the decentralization of foreclosure decisions by Narendra Modi’s government, state governments have been able to control the disruption of supply chains. But demand has yet to recover to pre-COVID levels.
The past three months have seen selective lockdowns in COVID hotspots. Economic demand does not only depend on the propensity of consumers to spend; it also depends on other factors like their confidence or belief that the overall economy will improve. In a crisis, essential buying continues but high value discretionary buying slows down as it is driven by sentiment. That is why it is extremely important that some of our leaders who still paint a bleak and negative future stop doing so. It does not help their political cause; instead, it causes enormous damage to the spirit of India.
There has been a record wheat production of 109.24 million tonnes in the current Rabi season. The government has given farmers an MSP of Rs 1,975 per quintal for wheat, among other Rabi crops. Most importantly, the price of mustard and My sister dal in open markets was above their MSP, by 25% and 7%, respectively. This increase in the realization price of these two products means that the farmers who sold them made a much higher profit. Over the past seven years, the Modi government has increased purchases from farmers for wheat almost 1.5 times and more than 77 percent for paddy. Pulses weren’t even bought by previous governments and the country depended on imports, which led to an irrational spike in its prices. Now farmers ‘public markets are over Rs 49,000 crore, and that money is going directly into the farmers’ wallet.
The rise in prices of My sister and mustard during the current supply period shows the success of the private market in helping the farmer achieve higher prices than the MSP. This was the original vision of the minimum support price. Diversification away from paddy will also allow the farmer to obtain a higher price.
The advantage of receiving the purchase price directly cannot be underestimated. Previously that money went through the commissionaires and the farmer never got the full money, and never on time.
The DBT (Direct Benefit Transfer) has certainly improved the purchasing power of the rural population, with more money in hand; earlier, by the arthiya (credit-related commission agents), farmers got the least money on hand after deducting high-interest debt.
Farmers in Haryana and Punjab got Rs 42,862 crore in their bank accounts as part of the Rabi supply. Haryana farmers got around 22,000 crore rupees for the Rabi harvest and 2,588 crore rupees in eight installments under Prime Minister Kisan Samman Nidhi, cash assistance of 6,000 rupees per year, in three installments .
Paying direct to farmers’ bank accounts through DBT is a major reform aimed at streamlining procurement processes and other benefits for the welfare of farmers. DBT shows that the government has the capacity to become more responsive, inclusive, agile and flexible on the welfare of farmers.
The intention behind direct payments to farmers is not to circumvent Arhatiyas but to improve the transparency of the process and offer the best options to farmers for their economic freedom. For decades scholars of Agrarian India have studied a problematic and pervasive phenomenon known as interconnected or nested markets. They have been particularly troubled by the interconnection of credit with commodity marketing in some agrarian systems, where farmers are constrained by the circumstances to take informal loans from a loan shark through whom they must. then sell their harvested products.
In repeated long-term exchanges, farmers, especially those with limited access to resources and support, become dependent on arhatiyas, giving rise to multiple operating opportunities. The precise ways in which farmers are stuck in such intimate economic and social relationships are often subtle and generally opaque, though almost always keenly felt. Now that Prime Minister Modi is seriously considering strengthening the conditions for farmers’ engagement in markets, the government must first recognize, and then competently replace, or dramatically reduce, the need for the multiple services that arhatiyas provide to farmers.
The problem – and a major source of “profitability” – comes from the arhatiyas’ informal money-lending activities. This quite distinguishes them from market intermediaries and aggregators in grain markets elsewhere; in Bihar, for example, we usually find no evidence of credit interconnection and thin margins. Moreover, in Haryana and Punjab, the credit relationship does not affect all farmers in the same way; it disproportionately binds farmers who are largely excluded from formal credit channels and services, especially marginal small farmers, sharecroppers and sharecroppers. Fieldwork in these markets also shows that they often provide credit to the many farmers who cannot access and repay their Kisan Credit Card (KCC) loans on the six-monthly rotation schedule; it avoids defaults but expands indebtedness.
Now, thanks to DBT, small and marginal farmers have sufficient liquidity to turn to formal institutional credit channels like KCC to avoid heavy interest debts on the part of farmers. arhatiyas. Now is the time for the RBI to seriously consider differentiated banking licenses for the agricultural sector. There will be many tenants for the rural sector, who will do a better job of providing and distributing credit for much needed reforms, such as crop diversification.
|CROP||MSP 2009-14 value (Rs)||MSP 2014-19 value (Rs)||% Increase|
|Legumes||645 Cr||49000 Cr||7496.8|
|Wheat||1.68 Lakh Cr||2.97 Lakh Cr||76.78|
|Paddy||2.06 Lakh Cr||4.95 Lakh Cr||140.29|
The author is Minister of Agriculture and Farmer Welfare in the Government of Haryana. The opinions expressed are personal.