Stockholm Syndrome in Punjab Mandis: How 'Artiyas' Keep Farmers Captive

Every year, ₹10,000 crore in ‘ransom’ is quietly siphoned from Punjab’s farmers—and taxpayers pick up the tab.

By Karan Bir Singh Sidhu, IAS (Retd.)
Former Special Chief Secretary, Government of Punjab
M.A. Economics (University of Manchester, UK)
Independent commentator on agriculture, Punjab’s economy and agronomy, public policy, and institutional reform.

Stockholm Syndrome in the Mandi

Inside a ₹10,000-Crore Shakedown—and How to End It

Punjab’s fields have long nourished the nation, yet the men and women who till them are trapped in a curious bond with their biggest tormentor—the artiya. Like hostages identifying with their captors, many farmers now defend the very middlemen who bleed them. This is agrarian Stockholm Syndrome, and it is eroding both pocket and pride in rural Punjab.

Killer Numbers at a Glance

• ₹40,000 crore – outstanding informal farm debt held by artiyas

• 18–24 % – typical annual interest; equals ₹7,000–₹9,600 crore bled from farmers every year

• ₹1,400–₹1,800 crore – statutory commission pool on wheat & paddy procurement

• ₹3 crore – average income of one active artiya (interest + commission)

• 3,000 active artiyas vs 15 lakhs farming households

• ₹30,000 crore – legacy cash-credit loan now serviced by the Punjab exchequer

• 27 % – small fraction of farmland on canal irrigation; the rest mines fast-depleting aquifers.

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The Silent Siege of the Smallholder

A Punjabi farmer awakens each season with invisible chains. He cannot buy seed or fertiliser without first signing an unregistered IOU at the mandi shop. He must route the entire Minimum Support Price (MSP) cheque through that same shop, knowing his “benefactor” will skim commission, interest and sundry deductions before releasing the crumbs. Any protest invites thinly veiled threats: Remember the blank pronote you signed?

This is not commerce; it is economic captivity. Rough estimates show informal credit from artiyas now exceeds ₹40,000 crore. At 18-24 percent interest, Punjab’s cultivators forfeit up to ₹7,000–₹9,600 crore in finance charges every year—four to six times the statutory mandi commission. No wonder a typical active artiya pockets nearly ₹3 crore annually while the average farmer juggles debt on two acres of leased land.

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How the Artiya Became King

• Weak co-operatives, weaker credit
  Markfed and village marketing societies—meant to supply inputs, advance cheap loans and market grain—withered under under-capitalisation and political capture. Artiyas filled the void with instant but extortionate cash.

• Policy blind-spots
  Delhi fixes MSP and walks away; Punjab borrows ₹60–₹70 thousand crore each year to pay farmers, incurring ₹5,000+ crore in annual interest. Taxpayers swallow the cost; artiyas keep the cream—insulated from audit, competition or consumer backlash.

• Cartel power in thin markets
  Only ≈3,000 licences handle 90 percent of mandi turnover. That is one gatekeeper every 500 farmers.

Result: a private cartel embedded in a public procurement chain—monopoly profits, socialised losses.

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The Farmer’s Agitation That Wasn’t

When the three farm-reform laws of 2020 offered farmers the freedom to sell outside the mandi cartel, tractors thundered toward Delhi—but the fuel, stages, and 24-hour langar lines were bank-rolled by the very artiyas whose gatekeeper status was under threat. Cameras framed the march as a peasant uprising; balance sheets told another story. Many of the loudest “farm leaders” were themselves commission agents, rice-sheller owners, or directors of private warehouses whose margins depended on keeping the public-procurement funnel exactly as it is.

The movement’s rallying cry soon shifted from repealing specific clauses to demanding a statutory MSP—a mirage artiyas knew could never be fully implemented across 23 crops or enforced on private trade, but one that handily postponed deeper questions about monopoly control. Repeal became the line in the sand; nuance was drowned out by sloganeering.

Delhi blinked. The laws were withdrawn. A collective cheer went up on Tikri Border, yet no new market channels emerged, farm-gate prices stagnated, and input costs kept climbing. What did change was the sound sleep of the artiya: his 2.5 percent commission, ₹3-crore annual interest income, and unchallenged custody of MSP cheques remained intact. The farmer, still paying ₹7,000 crore a year in “ransom interest,” discovered that the revolution had left him exactly where he started—except now the flag of statutory MSP fluttered as a convenient distraction from real reform.

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Cost to the State, Cost to the Soil

• Debt spiral – the ₹30,000 crore cash-credit legacy gap now costs the treasury ₹3,200 crore in interest every year—more than Punjab’s annual school-education capital budget.

• Water crisis – free power and assured paddy procurement drive groundwater extraction of ≈35 billion m³ a year; 76 percent of wells show a falling water table.

• Stalled diversification – with high-cost credit and captive marketing, less than 5 percent of gross cropped area shifts to pulses, oilseeds or maize despite subsidy schemes.

Every rupee siphoned by an artiya is a rupee not invested in drip lines, solar pumps or soil regeneration.

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A Three-Point Liberation Strategy

• Licence auctions & 48-hour DBT

  • Auction 3–7 produce-agent licences per mandi (liquor-vend style, but for 5-year term).

  • Up-front premium could raise ₹1,000–₹1,500 crore in Year 1.

  • The Procuring agency, not the licensees, must pay farmers by Direct Benefit Transfer within 48 hours—no escrow games.

• Register every loan & recognise every tenant

  • E-stamp all farm loans and promissory notes within 30 days; defaulting artiyas lose licence bond.

  • Compulsory Girdawari registration brings >10 lakh tenant-cultivators onto 7 percent Kisan Credit Card rates, smashing the usury monopoly.

• Plough the savings into diversification

  • Redirect the ≈₹5,000 crore freed from commissions and usury each year into a Punjab Agronomy Transition Fund.

  • Finance micro-irrigation, MSP top-ups for pulses/oilseeds, stubble-management grants, and solar pumps—investments that cut cost and water use by 10–15 percent within three years.

A Call to Courage

Punjab’s cultivators are not asking for alms; they are asking for freedom—from opaque ledgers, high-cost credit and the dread of harvests already mortgaged. The artiya lobby will scream; it always does. But the political class must decide: are 3,000 middlemen worth more than 15 lakh farming households, with nearly 75 lakh members, and the fiscal health of the state?

Breaking the artiya Raj will not be painless—yet captivity is costlier. Liberate the farmer, and Punjab can pioneer a second Green Revolution—one where prosperity flows to the field, not the commission counter.