When every business across the country is facing severe transactional issues post the demonetisation announcement, a Chennai-based dairy company has incredibly managed to pay its 3.10 lakh farmers their due-day salary directly into their bank accounts. Hatsun Agro Product Ltd produces about 28 lakh litres of milk per day, at Rs 26 per litre, sums up to daily payments of about Rs 7.3 crore. Despite a spate of payment default cases arcoss the country, R G Chandramogan, chairman of Hatsun Agro which has a turnover of Rs 3,444.59 crore, told Indian Express that he and his farmers “slept peacefully”.
As per Chandramogan, the company has over 9,800 centres from where the milk to collected, with every farmer supplying around 9 litres of milk on a daily basis. The company make payments to its farmers thrice a month respectively on the 1st, 12th, and 22nd of the following month. Salary is credited into farmer’s bank accounts against the daily invoices received.
The demonetisation announcement had a nominal impact on Hatsun and there was no effect on sales. The initiative to transfer payments to farmers’ bank accounts came as a challenge in the beginning as the Gujarat Cooperative Milk Marketing Federation (Amul) has a limitation on bank transfers to the accounts of primary village societies, which then pays their farmers in cash, said Chandrmogan
Amul is now asking its dairy union that pays around Rs 450 crore per week to near about 18,500 village societies, to set up a mechanism that allows online cash transfers to farmers’ bank account and Hatsun Agro is the first dairy to do the same.