Farmers Protest: Direct Bank Transfer

   Posted by: aman   in Other, Punjab

April 09, 2021

Day 135

Toll 361



The Direct To Bank scheme to deposit subsidies and payments directly to beneficiaries was started by the Congress-led UPA government in 2013. It was considered revolutionary as it dramatically cut down middle men and contractors. Now DBT is implemented in up to 317 schemes from 53 ministries. I do not know how the payment route works in all these schemes and ministries. I would love to learn. If you know, please comment.

For the last few years the BJP government has tried to apply this route to make payments on food grains the FCI or other agencies buy from the farmers. In theory, it looks good. Yet, Panjab and Haryana governments – states that have the best Agricultural Produce Market Committee in Asia, if not the world – opposed it. Tt is these APMCs or Mandis that are under direct attack through the Farm Laws.

The reasons to oppose are two:

a) this route of payment side lines the arthiyas – commission agents. Arthiyas are more than commission agents. In the absence of a system by which farmers or farm labour can procure easy, instant loans from co-operative banks or other institutional sources, the arthiyas actually act as the pivot to the agrarian system.

b) given the fact that agriculture is not remunerative, typically a small or marginal farmer takes a few acres of land on rent every season against fixed payment to owner whether the crop succeeds or fails. About 45 per cent land in Panjab is given out on rent and farmed by non-owners. The DBT payment will go to the absent farmers (owners) and not to real farmers (who have taken land on rent).

Until yesterday, the two state governments were opposing the Centre’s push to move to DBT. Yet, when Centre threatened to not procure the wheat this season unless DBT is implemented, the two governments – one Congress, another BJP – capitulated. Panjab is expected to produce 130 metric tonnes of wheat and Haryana 121 metric tonnes. MSP is Rs 1975 per quintal.

This is a blow to the system that has been in existence for the past many decades. No doubt, the system has issues, including how much margin commission agents draw and absentee landlordism. The need is to fix the whole system and not drop DBT from top. The need is for state (and Centre) governments to create a better system and support the farmers’ transition to that system but they failed in averting the DBT from affecting the small and marginal farmers who take land on rent. The move is insidious because when land owners are directly paid, small and marginal farmers will stop taking land on rent and will become labour in lands that are not their own.

It is because of reasons such as these, that the protesting farmers cannot trust either the state or the Centre to protect them and need to continue to protest. Tomorrow, from 8 am, the Western Peripheral Highway around Delhi will be blocked for 24 hours.

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