Cash crunch hits farm economy in Gujarat

By: | Published: April 18, 2018 12:23 AM

The situation is not so good in villages and small towns in the state. According to the commission agents, urban areas’ farmers are accepting payment partly by cheques but in villages, nobody is ready to accept cheques.

cash crunch, farm economy, gujaratCash shortage has affected routines in Gujarat’s agriculture sector as most of the transactions there are done in cash. (Reuters)

Cash shortage has affected routines in Gujarat’s agriculture sector as most of the transactions there are done in cash. Due to currency shortage, farmers are not getting payment for their produce in APMCs across the state and the situation is critical in some rural areas where banking facilities are poor. Winter crops such as wheat, jeera, pulses and groundnut are arriving in marketing yards in full force and farmers prefer cash as they need it to pay to others. Moreover, it is vacation time and most of the farm labourers will go back to their home towns. Ramesh Bhoraniya, a farmer and agriculture expert from Naranaka village of Rajkot, said, “After winter crop harvesting, agriculture labourers go back to their home towns for vacation and farmers have to pay their salaries and contract amount. Farmers are unable to make any payments to their labourers and others as sufficient cash is not available at this time.”

The situation is not so good in villages and small towns in the state. According to the commission agents, urban areas’ farmers are accepting payment partly by cheques but in villages, nobody is ready to accept cheques. “All the APMCs across the state have currency shortage and as a result farmers are selling their produces at lower rates for cash. As the banking is not strong in rural areas, it takes about a week’s time to clear cheque, therefore farmers prefer payment in cash,” said Atul Kamani, president of Saurashtra APMCs Commission Agent Association.

According to the state government official, this is because of some issue in printing of new notes and soiled notes. Gujarat Urban Cooperative Banks’ Federation (GUCBF) also has written to the Reserve Bank regarding the short supply. The state government is in touch with regional office of RBI and hoping for smooth supply of currency shortly.  A top official of finance department of Gujarat said, “It is not an issue with Gujarat. This is all over the country, there are some issues regarding printing of notes and soiled notes. We had talked with the regional director of the Reserve Bank regarding the shortage of notes in the state. The issue will be resolved in next few days.”

On the shortage of cash, GUCBF has written a letter to the RBI and the state government few days back and ought urgent measures to normalise the supplies. Jyotindra Mehta, chairman of GUCBF said, “It is matter of concern and we already made written representation to the RBI governor and the Gujarat government to normalise the supply. There is a significant cut in the supply of cash from (currency) chests. People will suffer if cash shortage does not solve in coming days.”

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