After 8-10 days of stupor due to the demonetisation move of the government, orange growers and traders in Nagpur and Amravati regions of Maharashtra have started limping back into business. Last week fruit prices dropped by nearly 40-50%, prompting farmers in Amravati to throw their produce on the streets. After a gap of nearly 10 days some traders have come forward offering cheque payments to farmers, Sridhar Thakre, MD, MahaOrange said.
For the first few days, no one knew what was happening and they did not know how to tackle the problem, he said.
Last year was pretty bad for farmers who were forced to sell their produce at throwaway prices of R5-12 per kg. And this time although the rates are good, there is no cash flow in the market, he said. Around 90% of transactions in the orange trade are done in cash, Thakre pointed out. Unlike the usual trade of this season, barely 10-15 % trade is being done this time, he said. Growers have now demanded that the government should either buy the fruits or help farmers export them. Farmers are also worried that their orchards need to be emptied by December 15 failing which there could be a delay in pruning for the next season.
As per the existing system, an agent brings buyers and the deal is fixed for an entire orchard for an amount. These transactions are essentially done in cash partly because farmers do not trust cheques issued by outstation traders. The minimum farm size in Vidarbha is 5 acres and with the rates that were prevailing before demonetisation, farmers could have easily recieved R15 lakh to R20 lakh for an orchard of five acres. Now the farmers are worried about the sale of their produce. MahaOrange has brought some traders from Delhi. But farmers prefer to deal with known traders.
Of the total orange production from Maharashtra, about 35% is exported to Bangladesh, while Kerala and Delhi are the other main markets for the fruit. The area under orange cultivation in the state is about 1.21 lakh hectares and the total production exceeds 7 lakh tonnes annually, through two seasons — Ambia and Mruga. Exports starts peaking during December and this time the domestic rates are good which is why the farmers may prefer selling in the domestic market, Thakre said. Last year this time rates were around R10,000 to R15,000 per tonne, and now farmers are getting R25000 to R30,000 per tonne. Exports to Bangladesh usually happen via road and some 100 tonnes to 200 tonnes are transported to Bangladesh through Kolkata on a daily basis. Last year, for the first time in many years, around 52 tonnes of oranges from Maharashtra were exported to Sri Lanka through the sea route. Bangladesh continues to remain the largest importer while exports to Russia and Europe are negligible. Out of the 7.5 lakh tonnes oranges that is produced annually, the exports were till now restricted to Bangladesh and Nepal.