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Cloud Hangs Over Rabi Procurement In Punjab As Centre, State Spar Over Direct Payment Of MSP

Representational Image

Representational Image

The Rabi procurement process is expected to begin in Punjab from April 10.

A major confrontation is brewing up between the Punjab government and the Centre over the delays by former in implementing government order on direct payment of the Minimum Support Price (MSP) to the farmers. The confrontation could spell trouble for the Rabi procurement process which is expected to begin in Punjab from April 10.

Union Food Minister Piyush Goyal, in a letter to Punjab Chief Minister Capt Amarinder Singh, has urged urgent compliance of the direct digital payment to farmers as mandated by the Finance Ministry’s Public Finance Management System (PFMS). The Centre has been giving extension to the State on numerous occasions in the past but now it has decided against any further extensions.

“Despite multiple exemptions and sufficient time, Punjab has not implemented norms for direct digital MSP payment to farmers. It is essential to align existing system so that MSP benefits are passed on directly to the farmers,” Goyal wrote in his letter to the CM.

Earlier, the Punjab Chief Minister had written to the Centre seeking deferment of the online payment of MSP to farmers by a year. The Punjab government had besides other points argued against the order claiming that title issues may arise where land had been given on lease for tilling by absentee landlords. A reason why Punjab had refused to integrate their land records with the central procurement portal.


Goyal, in his letter, has suggested that Punjab could follow Harayan’s software that enabled details of tenant or share-cropper to be uploaded on the portal with a disclaimer that this would not be legal proof for claiming ownership.

Punjab is the only among 12 procuring States not making the direct digital payment to farmers. As of now Punjab continues to pay farmers through arthiyas under the Punjab Agriculture Produce Marketing Rules-1962. Punjab government has argued that as per those rules the MSP payments were to be done through commission agents.

The procurement process will begin in the State from April 10 and there are fears that the confrontation could impact the procurement. The neighbouring Haryana has already implemented the online transfer and its procurement process has taken off.

The Centre has warned Punjab that in the event of non-implementation, it would not be obliged to reimburse the cost of procurement and other incidentals. The Centre has also pointed out to the State government anomalies in the commission agent centric payment system pointing out that during verification of payments in 2020, the Centre had detected an alleged deduction of Rs 12 per quintal made by arthiyas from the MSP payment at the cost of farmers.

first published:March 31, 2021, 20:11 IST