Direct payment to farmers – A way to escape from the labyrinth of indebtedness

With the proliferation of humans needs in a society since the last few years, the farmers are facing the serious challenge of getting struck in the labyrinth of indebtedness. The arthiyas i.e. the commission agents tend to exploit the farmers to a large extent which ultimately leads to the, harvest of misery.

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At present, the payments and bonuses are paid to the farmers by the middle men who tend to keep a large portion of money provided by the crop procurement agencies. In order to curb this menace, the government initiated the process of paying to the farmers directly.

What is direct payment to farmers?
In order to overcome this exploitation by arthiyas, the government has initiated ways of paying directly to the farmers. The new payment system helps to make payments in a hassle free, prompt and smooth way without the interference of the commission agents. The procurement agencies of the crop make the payments for the crop directly to the farmers in their respective bank accounts, or in the form of cheque. The farmers get themselves registered with the State Mandi board, in order to avail the direct payment facility, and avoid waiting for the dues by the commission agents. It is also known as person – to – person (P2P) payments.

The arthiyas i.e. the commission agents, who act as middle men in the monetary transactions between the farmers and the crop procuring agencies decided to protest against the direct payment to the farmers. However, the situation could easily be curbed with the intervention of The Food Corporation of India.

The Food Corporation of India (FCI) contributed evidently towards avoiding this exploitation of the farmers, by tying up with various banks for paying directly to the farmers for the grains, which are usually procured in the kharif season. State Bank of India, State Bank of Patiala and Punjab National Bank have been in contact with The Food Corporation of India, for the credit creation process of money being directly transferred in the respective accounts of the farmers.

During the kharif marketing season in the year 2010-11 the Food Corporation of India, initiated the process of catering the state owned co – operative banks, owing to the fact that the state owned banks have wider reach in the rural areas. FCI even doubled the number of pay offices in the state, to avoid the farmers from facing any sort of trouble in the process of direct payment.

This interface between the farmers and the state government has helped in bridging the wide gap between the government and crop growers thereby, ameliorating the sufferings of the rural poor in Punjab. Exploitation of farmers is a malaise which affects the agricultural sector and the economic growth of the state as a whole. However, with the process of direct payment to the farmers into operation a lot has been done save the farmers from the tight fists of the vicious circle.


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