1. Traders at largest onion market opt for cashless payments

Traders at largest onion market opt for cashless payments

Agriculture Produce Market Committees (APMCs) in Nashik region including Lasalgaon— the largest wholesale market for onion in the country...

By: | Pune | Updated: November 17, 2016 6:32 PM
A day after Prime Minister Narendra Modi announced the demonetisation of R500 and R1,000 notes, most wholesale markets in Maharashtra caught in to a situation where traders and commission agents did not have cash to pay farmers. (Reuters) A day after Prime Minister Narendra Modi announced the demonetisation of R500 and R1,000 notes, most wholesale markets in Maharashtra caught in to a situation where traders and commission agents did not have cash to pay farmers. (Reuters)

Agriculture Produce Market Committees (APMCs) in Nashik region including Lasalgaon— the largest wholesale market for onion in the country — have decided to resume onion auctions from Thursday after observing shutdown for more than 10 days following the demonetisation move of the government.

Lasalgaon, however will restart operations from November 18. Around 14 APMCs in Nashik region had been closed due to cash crisis. Now, traders in these markets have agreed to make payments to farmers through the banking system instead of cash that has been the norm for years.

A day after Prime Minister Narendra Modi announced the demonetisation of R500 and R1,000 notes, most wholesale markets in Maharashtra caught in to a situation where traders and commission agents did not have cash to pay farmers. While in some markets, commission agents and farmers agreed on payments at a later date, most markets in Nashik region had decided to close operations.

According to Jaydutta Holkar, chairman, Lasalgaon APMC, after a meeting with traders on Wednesday, a decision has been taken to restart operations from November 18. The remaining markets in Nashik will however reopen on Thursday itself.

“Traders have agreed to make payments to farmers through RTGS, DD, NEFT and cheques since it is not possible to obtain large amounts of cash. A decision has been taken to obtain xerox copies of the bank passbooks and IFSC codes of farmers and these will be used to make payments,” Holkar explained.

Farmers have been notified through various WhatsApp groups and other means of communication to bring copies of their bank passbooks when they come for trading.

Normally, onions worth around R3 crore are sold in the Lasalgaon market on a daily basis. Usually commission agents need at least R25 lakh to R30 lakh cash in hand for daily transactions and if banks do not give them money, they will find it difficult to operate. “Even if the banks open, traders and commission agents may not be given such high amount required for their operations,” Dilip Bankar, chairman, Pimpalgaon APMC had said.

After the demonetisation move, onion prices have been rising fast in the retail market where the rates are hovering in the range from R1,700 to R2,000 per quintal — twice the rate prevailing a week ago. Stakeholders attributed the rise to the decline in supply and lack of means to make payments.

According to industry experts, onion prices are expected to rise in November and December because of shrinking acreage under the crop and a delayed monsoon. Now the current cash crunch has compelled Lasalgaon APMC and other  markets to suspend operations.

Earlier, Lasalgaon APMC had suspended auction for five days from November 10. But after the demonitisation, the auction was suspended for an indefinite period.The average wholesale onion prices had increased by 37% in the past 15 days before the market closed — from R600 a quintal on October 25 to R825 a quintal on November 9.

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