Thursday, December 03, 2020

A New Enemy

Today’s politics and politicians thrive on othering. By pitching one against the other. By making some ‘other’ an enemy. Prime minister and his buddies have needed an enemy in everything they have tried to sell. For demonitisation it was kaladhan. For CAA-NCR it was the illegal termites in our country. It is a long list including China/ Pakistan/ Congress/ Nehru/ local opposition parties and leaders /NGOs /writers /activists /students /universities. Recently they have discovered a new enemy of the masses. Joining the ranks of China and Pakistan is the much maligned Artiyah (Bicholiya or Middleman as he is being labeled).

A mandi is a designated marketplace where a farmer brings his produce and sells it in an open auction. Mandis have a market committee – which looks after all affairs and takes care of interest of all stakeholders including farmers, agents, traders, labor, govt agencies, etc. Commission agents (Artiyah) is a licensed dealer who acts as an agent for the farmer. He gives farmer space to keep his produce, helps in basic cleaning, sorting and display of produce, conducts an open auction and pays the farmer. He receives money from the buyer (govt authorities or private buyers) including the levies (taxes/cess) and his commission for all the services he provides.

Why I am boring you with this? See the thing is, when Prime Minister or his buddies declare someone/something an enemy, the main stream media of today, the even more powerful IT cell of BJP and most of government machinery and institutions of today go in overdrive to prove that the declared enemy is an existential threat and needs to be dealt with strictly and immediately. That ‘enemy’ generally stands no chance against this Tsunami.

A friend from South India, who is sympathetic with farmer’s cause, received a forward on WhatsApp. It is such a beautiful piece loaded with ‘alternative facts’ and a beautiful ‘post truth’ ring to it. Long write-up but in essence saying the ‘Adhatis (Money Lenders)’ are sponsoring these protests so that they can continue ‘looting the farmers, the consumers, the taxpayers’ as these ‘6000 filthy rich Adhatis’ of ‘Punjab and Haryana’ don’t want to let go of the ‘6500 crores’ they make in APMC every year ‘without doing any work.’

Once the supreme leader declares an ‘enemy,’ the followers put all out effort in proving that ‘other’ the ‘enemy.’  So once again, why I am boring you with this? So, that we can see how this particular bicholiya, the artiyah, is or isn’t the enemy. The farmers don’t have an IT cell – they rely on you and me.

It’s already a long read and I haven’t even started on the topic! Bear with me. Infact, walk with me. For some real-life examples.

Let’s start with a quick walk in the fields. Mere desh ki dharti sona ugle – remember?  

The gold laden paddy stands tall. Combine harvester enters the field (my mother’s field, she is the farmer, I am here just to help her with the harvest). Smell the fragrance of crushed wet straw as the harvester moves through the field. Nearly five months of effort. Last few hours of suspense. Will the yield be good? With every tank that the harvester offloads into the trolley, ma asks me to run an estimate on yield. I keep her humored with my calculations. It’s all a guesswork anyways, till the gunnybags are filled, weighed, and counted. At the end of the three days’ work, final calculation is 35quintal per acre. She is happy. That’s the best in the area. This lady farmer (whose children speak and write English, wear jeans and (what the hell!) wear 2000 rupee shoes!) is quite competitive, you know.

I digress! Let’s get back to the case of Artiyah. He stands in the witness box. Waiting the verdict!

The trolleys reach the mandi. This is govt procurement of paddy on MSP. Our Artiyah has space at village mandi. Within 2kms the produce is at the mandi (for us, others bring it from further away, upto 8-10kms). The labour hired by the Artiyah offloads the paddy. (He sent a private bus to a remote place in Bihar this time, as there wasn’t an easy convenience for the labor to reach). He brings a moisture meter and checks. We are among the last to harvest and have ensured all grains are sufficiently dry. Jeet uncle harvested early and had to spend 2 days at mandi drying the paddy to reach the right moisture content (which means additional labor cost on farmer).  Moisture content ok, we wait for the fans to clean the paddy. It’s a bad day for power supply so the Artiyah gets the DG set started and gets the fans going. A few hours later (with a fan belt broken, replaced, fan restarted) the day’s produce is clean and ready for weighing and bagging. The weighing scales are rolled in. He shows me the calibration details (which he got done before the harvest started) and checks the weight setting – 38.3kg. 37.5k paddy and 800gm of the gunny bag (bardana in mandi-speak). Another few hours and all the bags are done. I count. Aartiya counts. The crop is now officially buyer’s (in this case of MSP procurement, one of the many rice mills appointed by state). Artiyah issues a receipt with the number of bags. Writes INR1888/quintal (that is the MSP for paddy this year). Next day the bags are stitched and loaded onto the trucks of the buyer by the labor. A few weeks later the money reaches ma’s account.

What did the Artiyah make in this transaction? The buyer – which in this case is state, pays him 2.5% commission (Punjab’s number, varies from state to state), pays the mandi taxes/cess (again vary from state to state), pays for the gunny bags and a part of payment for the labour. Farmer (us) pay a part of the payment for the labour - about 20 rupees per quintal. The Artiyah like any other shopkeeper pays all his overheads of running an establishment.

Note – the cess that the mandi board collects from buyer (in this case govt of India), which these days is close to around 2000crore for Paddy procurement goes into maintenance and upgrades of mandis and connecting rural roads. %age varies from state to state. Punjab has a higher percentage, which also means Punjab has a grain (anaj) mandi within 8-10 kms reach for every farmer.

MSP is the minimum support price govt announces for 23 crops every year. By definition, it implies there are other buyers who will procure at higher price. Of years of selling grains at mandis I haven’t seen anyone offer more than MSP. There is no auction in this instance, as there are no bidders above MSP.

In an MSP procurement – neither the bichauliya (Artiyah) nor the buyer made a killing by looting the farmer. Farmer got his MSP. Artiyah got his commission from buyer. Not an enemy in this case.

(Artiyah in the witness box wipes sweat of his forehead. He relaxes a bit. The hearing goes on…)

A few years back Ma experimented and grew basmati. Basmati isn’t procured under MSP (only high yield paddy varieties are supported). Since the private buyers don’t visit the village mandi, the produce had to be taken to the market at town – 10kms away in our case. Same thing – we get the produce to our Artiyah’s space at town. Now we wait. For buyers. The year before basmati had gone upto 6000per quintal, the reason for Ma’s experiments. She used to be a marginal farmer (less than one hectare of land) but she isn’t a marginal farmer now (one of the reasons I can afford those 2000 rupee shoes!). So, she has the bandwidth to experiment. But just like the mutual fund disclaimer there was the market risk. The produce lay there for the buyers to come, look at the grains, and offer a price. For two days no one offered more than 2500per quintal. It wasn’t a good year for basmati. Eventually, I just let it go at that rate. Basmati yields per acre are much lower than standard paddy – so that year per acre earning of basmati was way under paddy earnings.  Not that basmati to end users (you the city dweller Madam) was any cheaper that year. So, someone made money. Was it Arhtiyah? What did the Arhtiya make in this transaction? His commission@2.5% for providing the usual services. This buyer or the one he sold to or someone in that chain leading to consumer made a killing!

Note, some Artiyah’s do buy crop, act as aggregators and sell to a big buyer. But these are only few of them and for a few crops (could be basmati, maize, sunflower seeds, etc. crops that can be stored for some time).

(Reasonable doubt is the traditional, and highest, standard of proof that must be exceeded to secure a guilty verdict in a criminal case in a court of law. So far, all doubts remain. The atmosphere in the courtroom is getting tense for the majority party – the accusers in this case).

Let’s look at vegetables. Vegetables and fruits go to Sabji Mandis, which are typically different from Anaj Mandis. The Artiyahs of one mandi typically don’t operate at the other. It’s a separate license. We haven’t grown vegetables for many years so let me take you to our neighbour’s fields. Two of them actually. First gobhi, then aloo.

After months of hardwork and incurring of all the costs, the plastic bags are stuffed with gorgeous looking gobhi. Each plastic bag weighs 23-27kg. The tempo is loaded and off it goes to Jalandhar mandi – that’s about 55kms. Neither the village mandi, nor our town mandi, nor our district mandi has buyers for this quantity (there are sabji mandis there, for a small qty we go there, but today I take you to the mandi from where the produce would reach you big city dweller, processes are same at all sabji mandis irrespective of the size). So - Jalandhar it is. The tempo reaches mandi early morning. Like real early morning. By 4am, mandi is teeming with shouts of auctions everywhere. There are hundreds of farmers with their produce. First few auctions might follow last evenings trend. As the supply-buyer equation adjusts so does the rate - could go up or down any moment. One year he leaves one plastic bag of 25kg gobhi at INR50 only (Rs 2per kg) and one year he might get Rs 20per kg. (in a year when PM announces demo – he just ploughs most of his produce back into soil, there are no buyers and it isn’t worth the cost of labour to get it to mandi). Sitting in Delhi? Don’t worry - Rs 2 per kg is Rs 25-30 for you, Rs 20per kg is Rs 100++ for you. No matter what the farmer makes (profit or loss) or what the buyer makes in the deal (little profit or a lot of profit) the Artiyah makes his usual commission for his usual services. For vegetables/fruits in Punjab sabji mandis they make 5% commission – the buyer pays it as well as the mandi cess/taxes.

(Are we anywhere close to proving the Artiyah as the enemy number 1? The defense lawyer bangs his table. Apologies My Lord, he quickly offers as the judge glares at him.)

Aloo. Batata. Potato. A farmer could take this to sabji mandi and follow above procedure. Or he can pool with a few farmers and put up a large pile in a field. There are private buyers who know where aloo is grown and go and make purchase in the field. The Artiyah isn’t involved here. These buyers give a price to farmers and some years the farmer makes good money, some years they make little money and some years they lose money (you do hear those news bites on farmers dumping there produce on highways!). The buyers (or the chain of the buyers) typically always make a lot of money.

So - In his role as a procurement agent/aggregator the Artiyah doesn’t loot the farmer. He enables the sale of his goods and receipt of his money.

It is the buyer that decides farmer’s fortunes. There isn’t really a price discovery mechanism for farm produce. Even for crops where MSP is announced most of the procurement in India happens below that. The current protests are inherently for a demand for an assured income (which means assured price for their crop) for farmers.

But this post (this court hearing) is to decide if the Artiyah is the enemy. We are nowhere close to it yet.

What is the role where Artiyah faces maximum flak (My Lord)? In his role as a moneylender. In Punjab there are nearly 50000 registered commission agents (not the 6000 filthy rich Adhtis in Punjab and Haryana as the IT cell forwards will have you believe). In Punjab nearly half of the registered Artiyahs are farmers themselves who have taken this additional work to supplement their incomes. Still, most of the Artiyahs do act as moneylenders to their clientele.

The reason we have evil moneylender in our society is because the poor of our country which includes 70% of all farmers have very poor access to institutional credit. Credit availability to farmers is a much larger issue. “Non-institutional sources like arhtiyas financed 66.74 per cent of loans in unbanked villages and 54.45 % of loans in areas that had a bank in Punjab, a study by Centre for Research and Industrial Development (CRRID) on rural indebtedness found.”  State has failed to ensure credit availability. What little is available isn’t enough. Just an example – for a flat in a city the home loans go upto 75-85% of property value. When farmer’s go to a bank to get loan against land – it is about 10% of the land value. Plus, farmers earn every few months when there is harvest, so they need money in between. Banks aren’t such an easy credit provider to the poor and marginal. In words of Late Sushma Swaraj Aartiyah is a farmer’s traditional ATM, who gives money on a relationship of trust. She questioned the corporotisation of agriculture and the claim ‘sab bicholiye khatam ho jayenge.’ “Who will buy directly from farmers? New agencies will come up. New middle-men will crop up? So to say that you will remove middle-men is an outright falsehood.” She questioned if the corporates will give farmer money on a moment’s notice when he needs it? “Will the corporate talk to the dhoti clad farmer? Nahi, corporate office walon ko usmein se badboo aayegi.”

Let’s assume that we have a perfect credit facility to all farmers and all money-lenders disappear. Automatically, the Artiyah’s side business of money lending will disappear. The parties left between a farmer’s produce and its sale will be 1) Artiyah in his role as a service provider and 2) buyer.

The artiyah makes his fixed commission and provides a service. So, the buyer is the boss now. He (and market risks) decides what price farmer gets for his produce. Where is the assurance the farmer is protected from the greed of the buyer (and markets risks)? With the new laws removing limits on storage (in other words hoarding) even the consumer will be at their mercy. Any which way – the artiyah doesn’t come out as the enemy here, the market risks and big buyers who can hoard and control market are. Repeating again, the present struggle is to get govt to commit to minimum prices, some minimum assured income.

Now, lets assume that all mandis are open and no Artiyahs exist. Will the big corporates buy farm produce directly from farmer one by one? Of course not. They will employ intermediaries – another name for bicholiya. As Late Shushma Swaraj said – naye bicholiye aayenge. Now these bicholiyas won’t be governed by mandi laws. They will be governed by corporate objectives. Maximise revenues, minimize costs. Which means sell at maximum and buy at minimum possible. These new bicholiyas will work for whose benefit? Will they not be the enemy?

I stayed a few years in Delhi and then a few years in Bombay. The autowalahs in Delhi refused to go by meter and there was a ferocious bargaining for every ride (what with them being north Indians and us being north Indians). Compared to that auto rides in Bombay was makhan malayi. You stopped an auto, you stepped in and at the end of the ride you paid as per meter (and the driver returned your change, to the last rupee). Artiyahs at the moment are those metered autos. You know what the charge will be. When there will be no artiyas, and the next generation of bicholiyas take over - they will be those unmetered autos. The ride will be expensive and full of heated negotiations, and one that small and marginal farmer will never win.

Swaminathan reports in an urgent wake up call (this was 2005-2006) state “The acute agricultural distress now witnessed in the country, occasionally taking the form of suicides by farmers, is the symptom of a deep seated malady arising from inadequate public investment and insufficient public action in recent years. The precise causes of the agrarian crisis are many and varied, but there are five basic factors which are central to the present crises. These are: unfinished agenda in land reform, quantity and quality of water, technology fatigue, access, adequacy and timeliness of institutional credit, and opportunities for assured and remunerative marketing.”

The farmers are fighting for the last - assured and remunerative marketing.

In five big red flags he highlights lack of access, adequacy and timeliness of institutional credit (the reason farmer needs moneylenders).

In his five reports covering two thousand printed pages he spends a significant time on how govt should be addressing the shortcomings in access, adequacy and timeliness of institutional credit.

In all those reports he uses the word ‘commission agents’ only three times. The individual our Prime Minister wants to declare as enemy number 1 is mentioned three times and that too in passing reference.

Swaminathan gives a long list of enemies in that report. Artiya isn’t one of them.

My Lord, defense rests its case.

There are flaws in the current system, like there are bound to be in any system. But Artiyahs in their basic role as commission agents provide a service, which when they disappear will be handled by some other agent, some other bicholiya. As long as there is trade there are bound to be those who will be traders. Bichauliyas are even needed by our Politicians to garner votes (or to buy our elected representatives). Bichauliyas will never go away.

And that is why the farmers are asking for what Swaminathan recommended - assured and remunerative marketing.

Farmers don’t believe in the promises of jumla expert. They are asking for their rights in writing. Whoever believes in promises made by swearing on Ganga ka pani, note this. In Noida the water that is supplied to the residents officially changes its name from water to Ganga water after passing through Jal Board’s treatment plant. So, ganga water runs in the taps of the whole city. And every household uses water filters before consuming it. So, consume the promises made such by applying sufficient suitable filters.



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