Punjab and Haryana are the only states in which the bulk of the wheat and rice produced is procured by the government, which helps explain why farmers from these states are the most prominent in the ongoing protests. Arhtiyas (middlemen) seen to be the key backers of the ongoing farm protests.

Who are Arhtiyas?

Arhtiyas or often referred to as ‘bichauliya’ or ‘middlemen’, facilitates the transaction between farmers and the actual buyers, making them more akin to a broker. The buyer can be a private trader, a processor, an exporter, or a government agency like the Food Corporation of India (FCI).

Darshan Pal Singh, farm leader from the Kisan Mazdoor Sangharsh Committee (KMSC) explained why arhtiyas are looked at as ‘evil middlemen’ by most people. He said that historically and culturally, arhtiyas have had a bad reputation because they lend money to farmers at high interest rates.

“Arhtiyas are not middlemen. They take a commission (2.5%) for the work they do and the services they provide to the farmer. There’s hatred towards arhtiyas because they are money lenders also,” he explained. Singh said that in the absence of institutional credit for many farmers, they depend on arhtiyas for money.

“Earlier, there was a usury loan only. Those who gave that loan were called arhtiyas. But the loan which usurers give, the terms and conditions on which they give it are very strict. Once farmers get caught in the cycle, it is difficult for them to come out of it. That’s why historically and culturally, arhtiyas have had a bad reputation,” he said.

What service do arhtiyas provide?

Mulkh Raj Gupta, the president of the Arhtiya Association in Patiala explained the role of the Arhtiyas:

“The farmer brings his produce to us. Our labour unloads the produce and cleans it. Following this, auctions happen. We help the farmer with the auctions in the mandi. Auctions happen for both private and government buyers separately. Then the farmers are free and we give them the receipt. Lifting each farmer’s produce from the APMC mandi [to the buyers’ destination] is also our responsibility,” he said.

Darshan Pal Singh, farm leader from the Kisan Mazdoor Sangharsh Committee (KMSC), also said that there is need to make the arhtiyas’ lending process transparent because the clutches of non-institutional loan are also one of the main factors behind farmer suicides in Punjab. However, Singh added that the arhtiyas’ services within the mandi yard are crucial.

Arhtiyas also finances the farmers. The income of an Arhtiya is dependent on the quantity and value of produce routed through him, aligning his interest with that of the farmer.

Why Arhtiyas are supporting farmers’ agitation against the new Farm Laws 2020?

Arhtiyas are standing shoulder-to-shoulder with farmers in their ongoing protest against the Farm Laws 2020

The arhtiya associations of Punjab have condemned the new farm laws 2020 citing them as a ‘death warrant’ for the arhtiyas. They also apprehended that around seven lakh people will be rendered jobless by the said legislations. Thus, they have been continuously supporting the farmers’ agitation against the new agriculture reforms in the country.

Harbans Singh Rosha, president of Khanna’s Arhtiya Association has 270 licensed Arhtiyas. Harbans explains that the buyers pay only after 3-4 months and sometimes do not even pay. Hence, he on his part cannot delay the payment to farmers beyond 48 hours. 

He further warned the Central Government that his association will continue sending farmers, labourers and arhtiyas to the Singhu border until the Farm Laws 2020 are repealed which he believes weaken the mandi system and phases out MSP procurement.

To date, the association has sent around 50 buses and 80 personal vehicles carrying farmers, labourers and arhtiyas to the Singhu border.

In what it seems to be a “surgical strike” against the Arhtiyas (middlemen), the key backers of the farm protests, the center has asked the Punjab and Haryana governments to ensure on line payment for crop procurement at minimum support price (MSP) directly to farmers from next procurement season. The wheat procurement is likely to start in the next few weeks.

The center has said this is to ensure they get full benefit of the price offered by the government. The system in the two main the two main paddy and wheat procurement states channels the payments to Arhtiyas, who in turn pay farmers. This gives the serious leverage over farmers while also benefiting from mandi fees and commissions.

The middlemen, said officials, often pocket some of the payment and often act as informal money lenders. The move coincides with the ongoing protest against the three new farm laws and the demand for legal guarantee of MSP for crops, demands being fully supported by Arhtiyas who would be elbowed out if farmers are free to sell their produce outside the mandis.

Meanwhile, going a step further, Uttar Pradesh has implemented a biometric authentication system for farmers which proven to be a boon far faster of benefit for faster transfer of benefit on selling their produce at MSP. “In this case, you have no doubt the credential of farmers and even the Food Corporation of India (FCI) settles the demand raised by the state concerned quickly. Other states can adopt this model,” said a source.

According to food ministry, Orisha, Chhattisgarh and Madhya Pradesh are keen to adopt the biometric model. The sources said the UP experiment is at a formative stage and it is up to the states to adopt best practices. They said it will not be mandatory.

Talking to reporters at a web-based press conference, food minister Piyush Goyal said the government is committed to ensure MSP. He cited how the procurement of grain at MSP has gone up under the Modi government.