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Is This the Battle of Middlemen Against the Modi Government All in the Name of Farmers?

A series of measures can be listed to explain what all the Modi government has done for farmers. Even the critics can’t argue otherwise when one claims that money is reaching as promised in a timely manner to farmers under PM Kisan scheme. The works that are being done on the front of irrigation, soil health, timely supply of fertilizers, MSP implementation etc cannot be disputed.

For this very reason, critics of this government over farm policy will not deal with all such sets of facts. They simply ask- “But why there is an angry protest on the streets of Delhi? The government must have done something terribly wrong. Otherwise, how do you explain this chaos?”

Why is This Churn in Agriculture Economy?

In order to get the answer for this particular probe, one need to shift focus from farmers a bit and think about another important player in the agriculture economy – the middlemen. They come in variety of forms. They may be one among those who decide which farmer can avail loan waiver benefit after a cut. They may be the local moneylenders who control the lives of farmers as we explored in the instance of Arhtiyas of Punjab; they may be the group that thrives on commission gained from the sale of farmers’ produce.

A series of measures under the Modi government has significantly lowered the control of middlemen in agriculture and tried to deliver the benefits directly to farmers. The recent farm laws are arguably the most eminent of reform measures in this regard, since they give freedom to farmers to sell their produce to anyone and any part of the country.

The network of middlemen is feeling the heat, and that explains the present churn.

How Middlemen Losing Plot to the Benefit of Farmers

The Direct mantra: Earlier, loan waivers used to happen once in ten years, coinciding with elections. It is the politically connected middlemen who used to decide the beneficiaries among farmers. The much-touted UPA’s farm loan waiver had benefitted a little more than 3 crore farmers only. But under PM Kisan, beneficiaries from the small and medium farmers’ segment stands at 11.43 crore. While the once in a decade loan waiver of UPA was to the tune of ₹52,000 crore, over the ten years PM Kisan will credit ₹7.5 lakh crore in the accounts of farmers directly, without any leakage to middlemen.

Moneylenders Side-lined through Effective Credit System: When small farmers do not get timely institutionalised credit for farming activities, they will be forced to turn at local moneylenders who charge exorbitant interest rates.

As part of the Atmanirbhar Bharat Package, the Government has announced to cover 2.5 crore farmers under the Kisan Credit Card (KCC) scheme with a credit boost of ₹2 lakh crore through a special saturation drive. 1.5 crore farmers are already covered.

Under the scheme, government provides interest subvention of 2% and Prompt Repayment Incentive of 3% to the farmers, thus making the credit available at a very subsidized rate of 4% per annum. Now this benefit has been extended to Animal Husbandry including Dairy and Fisheries farmers for their working capital requirement, and the existing limit of collateral free agriculture loan has been raised from ₹1 lakh to ₹1.60 lakh.

Stopping the Leakage of Fertilizers: With 100% Neem-coated Urea, government has ensured that fertilizers should only be utilized in farms and cannot be diverted for other purposes, reaping the benefit of subsidy in the name of the farmers. Further, The Department of fertilizers has also implemented Direct Benefit Transfer System across all States/UTs since 2018. Under the DBT system, 100% subsidy on various fertilizer grades is released to the fertilizer companies, on the basis of actual sales made by the retailers to the beneficiaries through Point of Sale devices installed at each retailer shop and the beneficiaries are identified through Aadhaar Card, Kisan Credit Card, Voter Identity Card etc.

MRP of urea is also statutorily fixed. The MRP of 45 kg bag of urea is ₹242 per bag (exclusive of charges towards neem coating and taxes as applicable) and the MRP of 50 kg bag of urea is ₹268 per bag (exclusive of charges towards neem coating and taxes as applicable).

Freeing the Market to the Benefit of Farmers: Now, farm reforms enable farmers to sell their produce to anyone and anywhere in the country. While the local mandi system remains, farmers can now explore lucrative markets beyond mandis.

In fact, the process of freeing the market started with e-NAM initiative that got a major push under the Modi government.

National Agriculture Market (e-NAM) scheme, an online virtual trading platform provides farmers with opportunity to directly sell their produce at remunerative prices through competitive online bidding system. Till August 2020, 1,000 wholesale regulated markets across 18 States and 3 Union Territories (UTs) have been integrated with e-NAM platform. Tradable parameters for 175 commodities have been promoted for trade in e-NAM platform. A total of 1.67 crore farmers, 1.44 lakh traders and 1,722 Farmer Producer Organizations have been registered on e-NAM platform.


Just spare a thought about the number of middlemen who used to thrive, making their cut in the name of farmers before all these initiatives. It is but natural that this section is angry with the recent reforms that side-lines them from the picture and connect farmers directly with the market. Some of the finely equipped protest camps in Delhi apparently belong to these middlemen who are fighting for their interests in the name of farmers.

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The World of Arhtiyas – The Role of Moneylenders in Punjab-centric Protests That Nobody Talks About