Commission agent
Also called: Arhtiya · Topic: Agricultural Marketing, MSP, Buffer Stocks and PDS · NCERT: Beyond NCERT
Meaning
A commission agent, called arhtiya in north India, is a licensed intermediary in an APMC mandi. The Agricultural Produce Market Committee (APMC), the state-regulated body that runs the market, licenses him. He sells the farmer's produce in the mandi and takes a commission for it. He often also lends money to the farmer. This loan ties the farmer to that agent, so the farmer loses the freedom to sell elsewhere. Dependence on the arhtiya is one of the main complaints against the APMC system.
Example
A Punjab wheat farmer brings grain to the mandi. The arhtiya arranges the auction and payment and deducts his commission. Because he gave the farmer a loan at sowing time, the farmer returns to him every season. The arhtiya commission is also counted in the "procurement incidentals" that add to the government's cost of buying grain.
Don't confuse with
- Trader: a trader buys the produce on his own account and resells it. A commission agent only sells on behalf of the farmer and earns a fee.