When money stops: Notebandi takes life out of Gujarat’s mandis

Crop arrivals plunge to 15 per cent of normal, as farmers, traders scrounge for cash.

Written by Gopal Kateshiya | Gondal (gujarat) | Published:December 22, 2016 4:41 am
demonetisation, demonetisation effects,demonetisation poors, demonetisation gujarat, gujarat villages, currency demonetisation, cash, cashless economy, cash crunch, rs 500 notes ban, rs 1,000 notes ban, currency demonetisation, indian express news Groundnut auction in progress at Gujarat’s Gondal APMC. (Express Photo: Gopal Kateshiya)

AT 6 AM, there’s still time for the auctions, but farmers have already filled a giant shed in this town’s old APMC (agriculture produce market committee) yard with their fresh harvested vegetables. About half-an-hour later, a freshly shaven Ghanshyam Pokar, the auctioneer for Shree Patel Group, a leading commission agency-cum-trading firm here, arrives and is immediately surrounded by buyers that include vegetable vendors. The auction, then, begins with bids as low as Re 1 per kg, before settling at Rs 2 for brinjal. In almost all others — cabbage, cauliflower, red/green chilli, carrot, radish, lemon, spring onion and ginger — the prices don’t exceed Rs 10/kg. By 8 AM, when Pokar has finally wound up, the entire produce in the shed has been auctioned off.

Bakul Savaliya, a farmer from the outskirts of Gondal — 40 km from Rajkot city and housing Saurashtra’s, and one of Gujarat’s, biggest APMC — doesn’t hide his disappointment. The 50 kg of carrots that he brought fetched a mere Rs 4 per kg. “I’ve been coming here for the last 10 days and prices have never crossed Rs 8. At these rates, can I recover anything other than my own labour of digging out the carrots, cleaning and lugging them here?” asks this 34-year-old who has grown the vegetable on his 20-bigha holding (six bigha make a hectare).

Ramji Jamod, another farmer from Jamwadi, a village five km from Gondal, is similarly bitter about his 15 kg of green chillies grossing just Rs 150 at Rs 10/kg. He has reasons to be so: “It is biting cold, especially when I have to ride my bike and be here by 5 AM to find enough space for unloading the produce. And at the end, what am I getting?”

demonetisation, demonetisation effects,demonetisation poors, demonetisation gujarat, gujarat villages, currency demonetisation, cash, cashless economy, cash crunch, rs 500 notes ban, rs 1,000 notes ban, currency demonetisation, indian express news Dhiru and Ashok Mer with their groundnut crop. (Express Photo: Gopal Kateshiya)

Jamod’s sole consolation is that he has started getting payment in hard cash. After Notebandi — the NDA government’s November 8 announcement scrapping the legal tender status of Rs 500 and Rs 1,000 denomination currency notes — the Gondal APMC was closed for a couple of days.

“I tried hawking the vegetables myself, but found it too time-consuming and so returned to selling through the Shree Patel Group. They first did not pay anything for a whole week. Then, they paid Rs 7,000 in the old notes, of which I am still carrying Rs 4,000. But for the last two weeks, they have been paying in valid currency notes,” says Jamod. While he attributes the fall in prices to notebandi, Pokar — whose firm earns a 6 per cent commission, charged on the price paid by the buyer, on top of a 0.7 per cent APMC user charge — blames it equally on the spike in arrivals from a good crop this time.

The Class III-pass Jamod tills 50 bigha land taken on a three-year lease, costing Rs 80,000 annually. “Paying it isn’t an issue. My problem today is finding hard currency. The five quintals of kapas (raw unginned cotton) that I sold fetched me Rs 25,625, but the entire payment was through cheque. Since there was no cash, I had to borrow Rs 6,000 for paying the cotton pickers. I now need labour for picking the residual groundnut pods in the soil. As I’m not sure when the cheque can be encashed, it looks we (wife and three children included) will have to do the job ourselves,” he complains.

Jamod, during the kharif (post-monsoon) season, had planted groundnuts in 30 bigha, cotton in 15 bigha and vegetables — mainly chillies and val papdi (broad beans) — in his remaining five bigha. He is yet to sell his 40 quintals of harvested groundnuts, waiting for prices to improve. Vegetable sales are keeping his family going for the time being.

“I have sold Rs 25,000 worth of produce so far. But I have also been spending Rs 2,500 per week on pesticides alone, apart from irrigating the standing chilly using tanker water. I have already purchased seven tanker loads, each costing Rs 1,500,” notes Jamod. Given the acute water shortage, he has even resorted to harvesting tender green chillies. The ones that are half-ripe, he is allowing to further ripen, before harvesting, sun-drying and finally taking to the market.

Meanwhile, in the Gondal APMC’s new yard, Gujarat’s largest market for groundnut, the auctions start at 8:30 AM. On Monday — which saw arrivals of 16,043 bags of 35 kg each — the bids ranged from Rs 3,200 to Rs 4,305 per quintal. The average rate, at Rs 3,700 per quintal, was well below the Centre’s minimum support price of Rs 4,220.

Among the 100-odd farmers waiting for their produce to go under the hammer is 35-year-old Dhiru Mer, who belongs to Kundani village in Rajkot district’s Jasdan taluka. Although Jasdan has an APMC, he prefers travelling 80 km and paying Rs 2,000 to the trucker to sell at the Gondal yard, where prices are better. The auctioneer Hansraj Sardhara declares Mer’s two separate piles of groundnut “sold” at Rs 3,780 and Rs 4,055 per quintal. But Kishor Rajapara, who has placed the higher bid, is ready to pay Mer Rs 80,000 only through cheque. “I feel bad, but we ourselves are being paid by cheque and banks are allowing us to make weekly withdraw of just Rs 50,000,” states this trader. Mer picks out a Rs 20 note from his pocket, swearing he has nothing else — “not even money to buy lunch”.

December is the peak season for groundnut arrivals. “Normally, at this time, these would be one lakh bags daily, whereas we are hardly getting 15 per cent of that. Only farmers with debts to clear or having special family obligations are coming to sell”, admits Jayantibhai S Dhol, chairman of the Gondal APMC.

There is a dearth of buyers, too. “The only ones active are the oil mills and even they aren’t stocking up. Farmers come to me every day demanding cash. But I am unable to oblige, because there’s nobody to pay me by cash. I am issuing over 50 cheques daily, while running out of leaves every second day. There are many cases of delayed clearances and even bouncing of cheques,” observes Haresh Vadodariya, a commission agent and also a director of the APMC.

The cash crunch, post-demonetisation, has also slowed down rabi (winter) season plantings. Jayantibhai Hadwani, who cultivates 18 bigha in Navagam village of Junagadh district’s Vanthali taluka, got 40 kg of coriander seeds from a fellow farmer, but had to spend four days in bank queues to deposit his old notes and withdraw new currency. On Monday, the 50-year-old’s son lined up before the State Bank of India’s branch at Shapur, a nearby village, only to return empty-handed. Hadwani himself is owed Rs 15,000 by other farmers who had hired his tractor and thresher.

Sagar Makadiya, a farmer from Khadpipli village in Junagadh’s Mendarda taluka, has harvested 34 quintals of groundnut from eight of his family’s 10 bighas. He does not want to sell at the current rates, but was forced to borrow Rs 5,000 to pay labourers for picking up the residual groundnut pods and prepare his field for sowing coriander. The coriander seeds and fertilisers, too, he purchased on credit. Last week, Makadiya’s father sold three quintals of kapas from the remaining two bighas at Rs 5,140 per quintal. The trader who bought issued a cheque for Rs 16,000, which bounced, as the bank found that his father’s name had been spelt differently. So, Makadiya’s father has gone back to the trader, requesting for a fresh cheque for the same amount.

The worst-hit, though, are agricultural labourers. Six families from Nandurbar district of Maharashtra are currently camping in Khadpipli. “Farmers here owe us over Rs 8,000. We want to return home, but the pending dues are holding us back,” informs Sanjaya Nahade, who is one of those awaiting payment from equally cash-strapped farmers.

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