Agricultural Produce Market Committees (APMCs) across the state that have an annual turnover of Rs 37,000 crore felt the impact of demonetisation of Rs 500 and Rs 1,000 notes. Traders in some of the most well known APMCs, including the onion hub of Lasalgaon and Nashik have decided to shut down operations on Thursday to tide over the liquidity crunch. There are close to 900 APMCs across the state which regulate the trade of agricultural produce and ensure that farmers are not exploited and get a fair price for their produce. Farmers bring their produce to these markets where traders buy their produce. The entire transaction is in cash with close to Rs 100 crore changing hands daily.
However, the move to withdraw high-value denomination notes threw the functioning of these APMCs out of gear Wednesday. Many farmers landed at various APMCs in the state as usual with their produce only to realise that they could not receive cash payments.
“There were issues over dealing as traders did not have ample liquidity after the higher value notes were scrapped. There were a few problems when the market started in the morning, However, it was decided that rather than making payments today, the farmers would get paid in the next few days when normalcy is restored,” said Arun Kor, a trader at Yeola APMC.
In Lasalgaon, Manmad, Yeola and Manmad farmers agreed on taking deferred payments. In APMCs like Nashik, traders handed over cheques to farmers.
Traders also said that in order to reduce the burden on banks until normalcy was restored, traders at certain APMCs, including big ones like Lasalgaon and Nashik, would shut operations for a day. “It has been decided that until there is adequate cash supply, traders would refrain from taking part in the auctioning process. We believe that normal functioning will resume in the next few days when the banks start functioning,” Sohanlal Bhandari, President of Nashik District Traders’ Association, said.
Many traders also complained that because of the cap on cash withdrawals, it would be difficult for normalcy to be restored in APMCs for the next few days. “We see a lot of problems in the near future. APMCs work purely on cash transactions. We doubt whether the required liquidity will be available for our functioning in the next few days. The transactions that take place are of a higher denomination. The lack of high denomination notes will also hurt as farmers will not get paid on the same day,” Kashinath Kakad, a farmer from Pimpalgaon, said.