Arthiyas in Punjab's APMC Mandis

Singh and Bhogal’s article, “Commission Agent System: Significance in Contemporary Agricultural Economy of Punjab” (EPW, 7 November 2015) was timely and refreshing as agricultural markets are not fully understood in various debates about farmers’ issues in India, especially in the context of Punjab. They provide evidence on the extent and magnitude of the presence of commission agents in the state’s agricultural markets and the interlocking of various markets which take place due to the credit linkage these agents provide to farmers.

Singh and Bhogal use primary data to estimate the number of commission agents in the grain and cotton markets (wholesale Agricultural Produce Market Committee or APMC markets) of Punjab,as also the volume of produce handled by them and the commission these agents earn. They dwell at length on the inter-linkage of the credit, input and output markets of the state and argue that it has led to farmer indebtedness in the absence of institutional credit which is inadequate and costlier due to higher transaction costs despite lower interest rate. They point to the system of payment for the farmer produce through the commission agents as the root cause of trouble for farmers. The authors observe that these agents who do unregistered and informal business of moneylending recover their loans through this system of payment, though the farmer produce is mostly bought by state agencies like Food Corporation of India and Cotton Corporation of India (CCI). But, they throw no light on the proportion of kachcha arthiyas (commission agents) and that of pucca arthiyas (wholesale traders) of farm produce in the state. The two cannot be seen as the same though they may overlap to an extent.