Small and Marginal Farmers in Punjab: What Should the Government Do?

The Discussion Map charts important debates from the pages of E​PW.

With the advent of the green revolution in the mid-1960s, agriculture in India became increasingly industrialised and capital-intensive.

In their 2015 article, Shruti Bhogal and Sukhpal Singh point out that sources of credit and investments did not keep up, and this void was partially filled by informal moneylenders, known as katcha arhtiya in Punjab. Based on their research conducted with 300 farmers and 60 commission agents in Punjab, Bhogal and Singh suggest that while the informal moneylending system enables access to credit for farmers, it is on highly exploitative terms. The system not only turns farmers into bonded sellers––given that each transaction must be made through the moneylenders––but also makes them bonded buyers, since they are compelled to make purchases for their personal and farming needs from these moneylenders or their associates. The authors suggest creating a cooperative marketing system and the strengthening of direct payment systems.

Sukhpal Singh (different from co-author of the original article, henceforth referred to as Singh [2]) responds to the original article, arguing that the government’s intervention has worsened farmers’ returns, and that the state’s role should not be enhanced. He asserts that the original article makes factual and conceptual errors, besides overlooking contract farming and the existence of initiatives such as farmer producer companies (FPCs).

Bhogal and Singh reply to Singh (2), stating that he has not provided sufficient evidence to support his criticism of their research. Moreover, if private firms are given a larger role in the agriculture system, as Singh (2) suggests, they can bypass the minimum support price (MSP) system and leave farmers vulnerable and worse off.