Demonetization: Note ban hits farm produce, rates fallen by almost 20-30 %

After demonetization, the farmers products rates are down by almost 20-30% and they are hoping that the current situation will improve otherwise they will face the major financial crisis.

Kailash Patil, resident of Jalgaon, produced cotton but there are no buyers in the market. "This year we had the bumper crops due to the good rainfall. Initially, the cotton per quintal rate was Rs 6,000 per quintal but now it has come down to Rs 5,000 per quintal. And, the same with my other produce -jowar, bajra, soybean also. The traders are asking us to take the old currencies while the district co-operative bank where I have got an account, is not accepting the old Rs 500 and Rs 1,000 currencies," Patil said.

Another farmer Sanjay Patil from Bhadgaon said that the traders are telling them to take the cheque as a payment of their produce. "In my village, there is no bank so where should I go and deposit the money? This is harvest time. I cannot afford to go to town and stand in queue to open an account and neglect the crops. The cash transaction was easy and comfortable for us. The government's demonetization decision disturbed the entire our economy," he said.

Patil said, "We welcome the idea of fighting against black money and corruption. But where is the system and infrastructure that can ease our woes. The authority should have first created the infrastructure – bank in each village, round the clock electricity, and other required facilities. In villages, we face frequent power cuts so you can imagine other facilities. We are really in trouble. We produced really good crops this year but demonetization spoiled our dream of getting the good rates," he added.

Kushal Patil, the food grains traders at the Agriculture Product Market Committee (APMC) at Dhule, said that the small traders who were raising money on high interest from private money lenders and paying to farmers are completely finished now. "We can do business by issuing the cheques and transferring the payment through RTGS. However, farmers are not willing to accept it. They simply say that they do not have bank accounts. And those with accounts say if the money is deposited in the bank, the bank will deduct their loan amount taken from the respective banks first. They will not get anything even after selling their produces. So they are afraid to deposit cheque in banks as well. They want the payment in cash only," Patil said.

He said the farmers has a tendency to repay the banks crops loan in March or April at the end of their harvest season. "If the banks start deducting the money right now, how they will pay money to private money lenders from whom they had taken money at high interest rates. Besides, they have to pay for other expenses as well. Farmers are the most affected community after demonetization. They are reluctant to bring their produce in market at all," Patil said.

Sanjay Pansare, director at APMC, Vashi said that the fruit market is down by almost 50-60%. "People are spending the money on the essential commodities and needs only. Fruits come later. Therefore the fruit market is badly affected. There are small vendors who still come with the old currencies only. We are ready to accept, but the later government will only harass us when we go to banks to deposit," Pansare said.