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For Madhya Pradesh farmers, ‘parivartan’ after note ban means return to cash

Jitendra Agarwal, secretary of the Anaj Tilhan Vyapari Sangh at Ujjain’s Chimanganj mandi, the country’s largest for soyabean with daily peak season arrivals of 25,000-35,000 bags of 90 kg each, concedes that the move away from cash has hit farmers hard.

Written by Harish Damodaran | Ujjain | Updated: November 19, 2018 7:08:27 am
Tractor-trolleys laden with soyabean at the Chimanganj Mandi of Ujjain, Madhya Pradesh. (Express photo by Harish Damodaran)

For farmers in Madhya Pradesh and elsewhere, not getting proper “bhaav” (price) for their produce has been a major reason for disquiet in recent times. But no less a sore point is not receiving payment in “nakad” (cash), especially after demonetisation.

Kailash Patel has sold 36.10 quintals of soyabean from the 135 quintals produced on 20 of his 35-acre holding at Golaguthan village in Satwas tehsil of Dewas district in MP. At Rs 3,237 per quintal — the rate he got at the Kannod wholesale grain mandi, 29 km from his village — the amount realised comes to around Rs 116,856. However, all that he can take home from this in cash is Rs 10,000.

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“This is the maximum that traders pay in nakad, which I am told is also what the government permits. The balance Rs 106,856 is to be credited to my bank account. While I wouldn’t mind that, the problem is the 7-8 days it takes for this money to come. Payment through NEFT (National Electronic Funds Transfer) is supposed to happen the same day, but traders make all kinds of excuses — from mistakes in entry of account numbers to the IT systems in banks not working — to play with our money,” claims Patel. He believes there was “nothing wrong” in the earlier system, where farmers received their entire payment in cash. “The trader had no choice, and I didn’t have to see or call him again until my next crop sale. Today, even after the payment reaches the bank, I have to stand in line to withdraw cash, which is always in short supply at the branch near my village. Any withdrawal beyond Rs 50,000, moreover, requires my PAN card,” says Patel.

All this, according to him, has taken place after “notebandi” (demonetisation). “They (BJP) should be taught a lesson. It is necessary to bring about parivartan (change) by voting out this government in the coming state elections, if not in next year’s Lok Sabha polls,” he says.

Patel’s views are echoed by Ramsingh Chaudhary, a 100-bigha (52-acre) farmer from Vinayaga village in Ujjain district’s Ghatiya tehsil. “When a farmer comes to the mandi with his 30-40 quintals tractor-trolley load, he not only brings crop to sell but also takes fertiliser, seed, pesticide, oilcake, clothes, household utensils and kirana (grocery items) on his return journey. With Rs 10,000 in hand, there is little left once he has filled his tractor’s 55-litre diesel tank, incurred food and other expenses while at the mandi, and paid the labourers who have harvested and loaded the produce back home,” he says.

“The trolleys, therefore, return empty. Most farmers cannot even afford to hire trolleys and make repeated trips to the mandi,” says Chaudhary.

Jaideep Singh Solanki, who farms 26 acres at Jatashankar village in Bagli tehsil of Dewas, notes that 5-6 days for payment has become the norm in mandis. “Before notebandi, it was cash on delivery. For about one year after that, traders gave us cheques, which took 15-20 days to clear. They have since shifted to NEFT, but you have to keep calling them to ensure that the payment is made. A lot of our time gets spent in the bank, more so during June-July and November-December when cash is required to purchase inputs and pay labour. People in the government don’t understand these practical difficulties faced by farmers,” he says.

Jitendra Agarwal, secretary of the Anaj Tilhan Vyapari Sangh at Ujjain’s Chimanganj mandi, the country’s largest for soyabean with daily peak season arrivals of 25,000-35,000 bags of 90 kg each, concedes that the move away from cash has hit farmers hard.

A trader buying 1,000 bags from 30 farmers now has to pay only Rs 3 lakh upfront, whereas he would have shelled out Rs 30 lakh earlier at an average rate of Rs 3,000 per bag. Chimanganj mandi has quite a few traders, including Agarwal, handling 3,000 bags or more daily. That, in the pre-demonetisation period, would have meant making daily payments of up to Rs 1 crore in cash to farmers. “Arranging this cash from banks wasn’t a problem. We used to bring our requirement of Rs 500 and

Rs 1,000 currency notes in bags by two-wheelers,” recalls Agarwal.

He, however, denies that traders have benefitted from the new regime, which allows them to operate with less working capital and also delay payments. “On the contrary, our work burden has increased. Previously, we just had to withdraw cash and pay the farmer, with the transaction concluded then and there. But now, we have to go to the bank and physically fill out NEFT forms,” he says.

“If we have purchased from 30 farmers, it means filling 30 forms with their individual names, bank account numbers and other details, including those required for receiving government payments under schemes such as Bhavantar Bhugtan Yojana. Internet banking is not possible, given the slow connections here,” claims Agarwal.

Not surprisingly, the Opposition Congress’s election manifesto for MP has promised to ensure that farmers receive full payment for their produce within three days of sale in mandis. The party has also said that it would work towards raising the existing limit on cash payments to farmers — without specifying how and by how much.

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