Demonetisation: With rules eased for them, farmers confused who all can benefit?

On the ground, farmers — many of whom are already in debt — are now finding that the traditional network of moneylenders do not exist anymore, following the government’s decision to ban Rs 500 and Rs 1000 notes.

Written by Aniruddha Ghosal | Kolkata | Updated: November 30, 2016 12:13 pm

WITH THE Centre easing guidelines for farmers on Thursday, allowing them to withdraw up to Rs 50,000 per week from banks, one question that is doing rounds is “who is a farmer”. For those involved in agriculture in West Bengal — estimated to be two-thirds of the state’s 91 million population — the question and its potential answers have dire consequences.

While the average area owned by each household in Bengal is 0.174 hectares — the smallest in any state of India — officials said the sheer fertility of land in the Bengal delta meant that many, particularly marginal landowners, cultivated their land to supplement their income. Take for instance the case of Dharani Kanta Bhowmik (55), a schoolmaster who died on Tuesday in Cooch Behar after standing in queue for three consecutive days. Bhowmik owned less than 0.1 hectares and like many others in Cooch Behar, cultivated paddy. He had been trying to withdraw money to pay labourers who worked on his land.

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On Thursday, Economic Affairs Secretary Shaktikanta Das announced that farmers would be allowed to withdraw up to Rs 25,000 per week against crop loans, subjected to limits. This would also apply to those who hold Kisan credit cards. Bank accounts needed to be in the name of the concerned farmers.

On the other hand, traders with Agricultural Produce Marketing Committee (APMC) markets, would be able to draw of Rs 50,000 per week to pay wages and other sundry expenses.

Almost 1,500 km away, at Boinchi in Hooghly, small-time trader Bibhash Sen who also grows potatoes on his land, is confused. “I have three katha of land (0.1 hectares) on which I grow paddy. But I don’t have a kisan credit card. Does that mean I would not be able to avail this relaxation? I went to the cooperative bank, but no one knew. I will go again on Monday. I desperately need money to buy seeds and begin planting.”

As of June 2016, only 31 per cent of the 17 lakh targetted Kisan credit card accounts had been opened, said State Level Banker’s Committee records.

Moreover, as per government records, Bengal only has 2,918 APMC markets and agriculture — in spite of the state being food surplus — remains largely informal. But unlike other food surplus states, small and marginal farmers contribute almost 86 per cent of the total output in Bengal. But the inherent informality of the agricultural system implies that these small and marginal farmers continue to be deeply in debt, with an estimated 88.7 per cent of all indebted ones owning land less than 1 hectare.

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On the ground, farmers — many of whom are already in debt — are now finding that the traditional network of moneylenders do not exist anymore, following the government’s decision to ban Rs 500 and Rs 1000 notes.

Prabir Sengupta, a small-time farmer in Howrah’s Andul area, said: “The demonetisation move has spelt disaster for me. As a BJP supporter, I had initially welcomed the move. But it is obvious that the government didn’t think this through and take into account how agricultural practices are in different across the country.

Claiming that wholesalers had refused to buy his potato crop citing inability to pay in cash, he added: “I have a debt of almost Rs 7 lakh and will have to take more loans to pay for labour and fertiliser. Last year, there was overproduction and prices suffered, now this.”