No cash, no coins, now no cheques amid crashing prices irk farmers
One month after demonetisation of two high-value currency notes, the woes of farmers and the co-operative banks they depend on seem to be never-ending.india Updated: Dec 13, 2016 12:33 IST
One month after demonetisation of two high-value currency notes, the woes of farmers and the co-operative banks they depend on seem to be never-ending.
Last week, furious farmers in Nashik district locked out their bank when they realised that despite standing in a line for hours, their turn for receiving cash would never come. The incident happened at the Nagarsul branch of the Nashik District Co-operative Bank (NDCC) when the managers after distributing Rs 2 lakh in cash to the first 100 people in the queue announced that they had run out of funds. Police had to intervene and the farmers agreed to unlock the doors only after bank officials agreed to disburse another Rs 2 lakh to those waiting in line.
But that immediately brought into question that where had the additional funds come from? The NDCC is already under the scanner of the income tax authorities for unusual activity within various taluka branches of the bank between November 10 and 13, days after the demonetisation of high denomination notes by the Union government. A total of 1.93 lakh account holders deposited Rs 312 crore and that is being seen as a suspicious activity by authorities.
On Thursday, chairperson of the bank Narendra Darade submitted a 6,000-page report detailing all deposits at the bank’s 213 branches to the I-T authorities, who have launched an investigation into the furious activity on those few days. Though bank managers maintain that debtors repaid their crop loans in old notes at this time, it is taking some convincing because the bank, like many other co-operative banks across the state, is promoted and headed by several sitting and former legislators and politician across all political parties.
It has not helped that various small-time leaders connected with the co-operative sector have been discovered in possession of large amounts of new bank notes within a short period of the demonetisation - for example a car belonging to current minister for cooperatives Subhash Deshmukh’s Lok Mangal group was caught with Rs 92 lakh in cash on November 18 and have tended to pass it off as money withdrawn to pay farmers and workers at various factories.
The issue has been compounded by the fact that, according to the existing law, farmers need to be paid in cash instantly for their produce – this season, sugarcane is arriving at factories in large quantities – to insulate them against fraudsters who may want to pay them through dud cheques. No delay in such cash payments is also countenanced for the same reason.
Such compulsions and possible violations under the guise of needed cash payment to farmers is also making the lives of the intended beneficiaries even more miserable. They have no money to buy, spend or deposit and all their activities are at a standstill. That is why angry farmers across districts of Maharashtra are locking out their banks.
However, co-operative banks are sandwiched between such genuine account holders and those who might be using some accounts fraudulently - that suspicion, according to Hemant Fitter, associated with a co-operative bank in Surat in the neighbouring state of Gujarat, is keeping them undersupplied by the Reserve Bank of India. “It is true that in the first few days the top directors of banks here made use of the first funds to change their own money, nothing came to the poor farmers. Now farmers’ anger is rising but co-operative banks have come under suspicion so they are the last priority on the RBI’s list,” Fitter told Hindustan Times.
So what happens to farmers bringing their produce to the Agriculture Produce Marketing Committee yards? Brinjal sold at Rs 2 per kilo last week. Coriander on Thursday sold at Re 1 per bunch. Nashik produces large quantities of this herb and farmers from the district were looking at markets in Surat and other nearby towns in neighbouring Gujarat to tide over their crisis. But now that coriander from Gujarat has begun to flood the markets there, Maharashtra’s farmers are faced with crashing prices and no buyers – even Re 1 and Rs 5 coins and smaller notes of 10s and 20s are in short supply at the wholesale markets.
Then, again, onions which are beginning to arrive at the APMC yards across the district, are staring at a crash in prices which could fall below even that of onions exported from Pakistan and China, according to the Lasalgaon APMC chairperson Jaidatt Holkar. The APMC was shut for several days until last week as traders refused to hold auctions of farm produce due to the cash crunch. But now, says Holkar, “We have decided to pay farmers by cheque to tide over the crisis.”
In a tragedy of almost comic proportions, traders have now run out of cheques and banks which are snowed under the cash deposit and withdrawal duties, have told them they have no time to print and despatch fresh chequebooks, according to Shivaji Patil. Patil is a trader at the Nashik APMC and has been running from pillar to post for the last three days to secure one.
Farmers are then back to square one. Their distress slowly turning into anger. Traders fear it could be their turn next to face their ire.