Demonetisation gives digital payments boost to dairy farmers; over 1 mn accounts opened

By: | Published: December 31, 2016 6:30 AM

While digital transactions have seen a jump in several areas of commerce the organised dairy sector hasn’t been left behind.

digital transactions, demonetisation, organised dairy sector, Amul, Hatsun Agro Products, Online PaymentWhile digital transactions have seen a jump in several areas of commerce the organised dairy sector hasn’t been left behind. (Source: IE)

While digital transactions have seen a jump in several areas of commerce after the government announced demonetisation of R500 and R1,000 notes on November 8, the organised dairy sector hasn’t been left behind. Milk farmers affiliated to both the state cooperatives and private companies have opened more than a million new bank accounts and have also received payments in them since November 10.

“In the last six weeks, we have opened 8 lakh new bank accounts of dairy farmers. Currently, more than 19 lakh farmers are getting paid for milk sold to the cooperatives through bank account,” RS Sodhi, managing director, Gujarat Cooperative Milk Marketing Federation or Amul, told FE.

About R310 crore is now being transferred to farmers’ accounts by Amul on a weekly basis, almost double the level before demonetisation. This apart, R75 crore is now being transferred every 10th day to some 3 milk producers by Chennai-based private dairy major Hatsun Agro Products, in a signal that e-payments are catching up among private players too.

Sodhi said Amul has asked banks to open branches in tribal areas of Gujarat so that all the remaining farmers could open bank accounts. Amul pays around R450 crore every week to farmers, of which around 70% now have bank accounts.

Sources said the department of animal husbandry under the Union agriculture ministry has directed National Dairy Development Board, Delhi Milk Scheme and all the state-level dairy federations to ensure direct payment to farmers’ bank accounts in the next one month or so. Other state-level milk cooperatives, who pay around Rs 120 crore to farmers daily, have also been asked to open bank accounts for farmers, with the objective that all 1.6 crore dairy farmers in the country receive payments in their banks by January-end.

Meanwhile, six weeks after demonetisation, the arrivals of fruits and vegetables (F&V) in two of biggest wholesale mandis – Azadpur (Delhi) and Vashi (Mumbai) have gradually come back to the normal level, thus ensuring uninterrupted supplies which has resulted in stable retails prices. “Consumers across urban and rural areas have been getting supplies of fruits, vegetables, meat products, milk, pulses and other commodities without any disruption. At the consumer ends, because of steady supplies the prices have been stable,” Ashok Gulati, chair professor for agriculture at ICRIER told FE. He said prices of F&V have been lower than other months of the year because increase in supplies usually witnessed in the winter months.

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Traders in the two biggest wholesale mandis (Azadpur and Vashi), which receives more than 18,000 tonnes of F&V daily for ensuring supplies to Mumbai, Delhi and adjoining cities say that cash availability has improved considerably since the demonetisation was announced on November 8 although it would take a month or two for the normalcy to return. Experts say that because of ‘resilience’ in supply system for even other products like milk, meat, pulses etc, the supply chain has not been broken.

“As most of the transactions are in higher in value and farmers bring in their produce from states as far as Himachal Pradesh, Jammu & Kashmir, Karnataka, Andhra Pradesh or Tamil Nadu, the payments are mostly made through bank transfers or through credit or debit cards swiping,” Shivaji Pahinkar, Secretary, Agricultural Produce Market Committee (APMC), Vashi, said.

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