With the currency crunch following demonetisation pushing workers in Kerala’s dairy, cashew and plantation sectors into severe crisis, owners are warning that hundreds of families may have to go without food this weekend.Workers in these sectors are paid their wages in cash, either weekly or monthly, but the abrupt ceiling on withdrawal of money has virtually tied the hands of employers.
The Kerala Cooperative Milk Marketing Federation (called MIMLA), an umbrella society of three milk unions in the state, makes payments to dairy farmers’ societies via bank accounts. These societies, in turn, hand over cash to farmers every 10 days.
MIMLA procures 11 lakh litres of milk a day from about five lakh dairy farmers, at the rate of R30 per litre. Accordingly, MIMLA needs R33 crore to pay in a day, and transfers the money into accounts of the 3,000-odd local milk societies through RTGS.
Last week, these societies could not withdraw the money to be paid to farmers due to the ceiling on withdrawal. In Wayanad, one of the largest milk supplying districts in Kerala, 55 dairy farmers’ societies have not paid farmers.
MILMA chairman P T Gopala Kurup said though dairy farmers have bank accounts, the practice is to give them money. “If we deposit in the bank accounts, it would affect the farmers’ daily activities at the dairy, which in turn would hit milk production. The societies could not pay the farmers last week. The issue would turn worse this week. Let the RBI find a solution,” Kurup said.
Farmers can’t ignore the daily upkeep of cattle or collection of fodder crops, and hence prefer cash instead of money transfers into accounts, which would require them to travel to banks or ATMs.
The struggling cashew sector employs two lakh workers, many of them belonging to the BPL category. Only a few of the 300-odd cashew factories in Kerala paid their workers last week, according to industry sources.
Cashew-processing units, both in government and private sectors, mostly withdraw money from their bank accounts on Fridays and distribute it to their workers the next day. A worker is paid R280 a day.
Said Babu Oommen, the Managing Director of Kollam-based Alphonsa Cashew Industries, whose firm’s weekly salary bill is around R40 lakh, “We didn’t pay anyone last week. If the RBI does not relax the ceiling on withdrawal, the crisis will turn worse this weekend. I fear workers would go hungry or resort to a revolt. This is apart from the sharp fall in sales of cashew in the wake of currency crisis.”
In the plantation sector, workers are paid salaries on the 10th of every month. With the demonetisation announcement coming on November 8 night, the estate workers are yet to receive even last month’s salary. Besides, they have not been given the weekly allowance, paid every Saturday. Workers have accounts, but the branches are far away from where their live on estates, and so most prefer to take cash.
In the high ranges of Munnar, 15,000-odd estate workers who live up to 40 km away from town are in crisis. In the north Kerala district of Wayanad, another 13,000 workers are facing the same predicament.
Rippon Estates (Wayanad) Manager Prakash P K said estates pay their workers in cash at their field offices. “The ceiling on withdrawal has made us helpless. Workers will miss a day’s work if asked to collect their salary from a bank or ATM. Due the present crisis though, many are planning to move to bank accounts,” said Prakash.
Wayanad Estate Workers’ Union secretary K T Balakrishnan also warned of a dire situation if workers did not get their salaries by this week. “No one wants to go to a far-flung ATM to collect salary sacrificing one day’s work and spending on travel fare. The workers are surviving by buying provisions on credit. But that will not last,” said Balakrishnan.