To keep pace with the rising trend of going cashless, the state government will embark upon a survey on how the over 300 agricultural produce market committees (APMC)s can do away with cash transactions. This work, government officials said, would be tedious given the low penetration of alternative channels of payment in these markets.
Post-demonetisation, the APMCs were worst hit as most of their transactions had been in cash. The whole trade chain, which includes farmers, traders, commission agents, head loaders, was cash-based, mostly using higher denomination notes. Many APMCs in the state had infact suspended operations in want of notes.
Director of marketing Kishore Toshniwal had issued a letter, asking the traders to encourage paying through alternative methods like cheques or Real-time gross settlement systems (RTGS).
At present, around 40-50 per cent of the trade in non-perishables like soyabean, grains, pulses etc. is carried out through alternative payment methods.
Most of the bigger traders in APMC prefer cashless transactions. But, almost 90 per cent of the trade of perishables like fruits and vegetables, and flowers is done through cash. The state government is planning to make these markets cashless.
According to officials, cashless transactions had been frequent in bigger markets like Navi Mumbai, Latur, Pune etc. But, making APMCs go cashless would be herculean. One of the major hurdles, they pointed out, was the lack of complete banking network in rural areas.
Nitin Kalantari, CEO of Kalantary Foods headquarters in Latur, said transactions through cheques will take time to catch up. “Since demonetisation, around 25 per cent of the farmers have started accepting payments in cheques,” he said, while adding that technologies like RTGS are at times difficult to operate due to low connectivity in rural areas.
Similarly, president of fruits traders in Navi Mumbai Sanjay Pansare also admitted that the move would be difficult. “Most of the trade happens only in cash. It would take more than two-three years to go cashless,” he said.