To regulate non-institutional loans to farmers by commission agents (arhtiyas), the Punjab government has notified a “fluctuating” rate of interest of 11.8%.This is to make the Punjab Settlement of Agricultural Indebtedness Act passed in May functional. Farmers wonder how they will come to know when the rate goes up or down,while arhtiyas say the rate is far too less than that of banks.The government has linked the interest to the State Bank of India (SBI) base rate of 9.3%and offered commission agents 2.5% over and above it for running expenses. It has clarified in the September 6 notification that rate will change with the SBI figure but the fluctuation won’t be notified, meaning the farmers and the arhtiyas will have to find it out themselves.“This interest rate won’t cover our day-to-day expenses,” said Arhtiya association president Ravinder Singh Cheema. “We will meet shortly to decide the next action.” Of Punjab’s Rs 36,000-crore farm debt, about Rs 12,000 crore is non-institutional — given by 25,000 of 30,000 arhtiyas who have licence from Punjab State Agricultural Marketing Board (mandi board).Balbir Singh Rajewal of the Bharati Kisan Union (Rajewal) accepted the new rate but said: “How will they (the government) make sure the commission agents don’t charge us more than 11.8%? For as of now, arhtiyas charge farmers more than 36%.”“The additional 2.5% we have given to the arhtiyas for overheads is what Nabard (the National bank of Agriculture and Rural Development) offers to the state co-operative banks,” said a top officer behind fixing of the rate. “Arhtiyas can charge farmers any amount but if the debt goes bad, the settlement will be based on the official rate. Banks charge farmers compound interest, while the arhtiyas charge them simple interest.”The five divisional forums — in Patiala, Jalandhar, Ferozpur, Faridkot and Rupnagar —look into debt settlement. “These will function better when a rate of interest has been fixed” said an agriculture department officer. Repeated crop failure, stagnant productivity, shrinking income, and piling debt have forced many farmers to commit suicide, and arhtiyas are accused of being main culprits, so the state government was under pressure to bring in a law to deal with it. The bill was proposed in 2001 and 2006,and took another 10 years to become an Act.