1. Demonetisation: Boost for Amul’s cashless drive

Demonetisation: Boost for Amul’s cashless drive

Amidst cash crunch following the Centre’s demonetisation move, the country’s biggest dairy federation Gujarat Cooperative Milk Marketing Federation (also known as Amul) has decided to opt for cashless transactions. The move would ensure 33 lakh farmers receive money in their bank accounts for milk procured from them.

By: | New Delhi | Updated: November 21, 2016 6:46 AM
The move would ensure 33 lakh farmers receive money in their bank accounts for milk procured from them. (Representative image) The move would ensure 33 lakh farmers receive money in their bank accounts for milk procured from them. (Representative image)

Amidst cash crunch following the Centre’s demonetisation move, the country’s biggest dairy federation Gujarat Cooperative Milk Marketing Federation (also known as Amul) has decided to opt for cashless transactions. The move would ensure 33 lakh farmers receive money in their bank accounts for milk procured from them.

According to GCMMF managing director RS Sodhi, at present 60-70% of dairy farmers, affiliated to 17 district dairy unions and 8,000 village cooperative societies, have access to bank accounts where funds are transferred directly in span of a week or fortnight for the milk procured.

“We have been stressing for the need to go for cashless transactions for the last couple of years. We have asked all our dairy unions to help farmers open their bank accounts in the next couple of months,” Sodhi told FE.

GCMMF sells its milk and allied products under Amul brand.

GCMMF through its affiliated unions make a payment of around R450 crore per week to 33 lakh farmers for milk procurement. “Because of shortage of currency notes, many farmers face difficulties in getting cash after selling milk to us,” he said.

To deal with the cash crunch, the Gujarat government has asked RBI to allow District Central Cooperative Banks (DCCBs) to dispense cash or exchange the demonetised R500 and R1,000 notes. “As most of the dairy farmers belong to small and marginal category, if cooperative banks are allowed to give cash to dairy farmers it would ease the situation,” Sodhi said.

Meanwhile, around 30% of the 3.4 lakh dairy farmers, who supply milk to Amul’s biggest affiliated union Banaskantha District Co-operative Milk Producers Union aka Banas Dairy, who do not have bank account are facing cash crunch. Banas Dairy has a share of 25% in Amul’s daily procurement of more than 1.6 crore litres. Banas dairy on an average gives around R150 crore every fortnight to farmers through 1,400 village-level dairies.

“We have commenced collection of data about those farmers who still do not have bank accounts and there are many farmers who are not operating their Jan Dhan accounts,” Bipin M Patel, managing director of Banas Dairy, said.

Of the 370 DCCBs in the country, 18 are in Gujarat.

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