The Gujarat model of cooperative agricultural economy appears to be having trouble sustaining itself post demonetisation of R500 and R1,000 notes by the Centre.
The Saurashtra region is likely to be worst affected as it has the primary market yards where farmers sell their produce before it is picked up by traders taking them to different Agricultural Produce Market Committees (APMCs) across the state.
Gondal APMC secretary Ashish Somaiya said, “Saurashtra is the primary market for farmers and they are mostly paid only in cash. Since the demonetisation, we are finding it tough to make them accept cheques. There are many villages in the region where nationalised banks do not exist. Only small branches of district central cooperative banks (DCCBs) are present.”
DCCBs in Gujarat were restricted from exchanging old currency after the Reserve Bank of India received complaints of wrongdoing at Ahmedabad District Cooperative Bank. The state has 18 DCCBs, with 1,272 branches spread across rural areas where private banks are hard to come by.
Office bearers of 65 market yards in Saurashtra have decided to meet Gujarat chief minister Vijay Rupani and request him to look into the problem. Trade has come to a standstill at these yards since November 9, a day after the demonetisation announcement was made.
Meanwhile, the dairy cooperative sector has its own troubles, with 80% of farmers affiliated to the Rajkot District Cooperative Milk Producers’ Union (RDCMPU) not having received their payments.
Speaking to FE, Govindbhai Ranpariya, chairman, RDCMPU, said, “We have deposited R12 crore for the farmers in the bank and R13 crore was released today as well. However, because of the limit on cash withdrawal, 80% of payments have not been made. Additionally, the restriction on DCCBs is not helping the situation for farmers either.”
Ranpariya fears that if the situation continues in this manner, dairy farmers currently affiliated with the union may shift their supply to the private sector. He said, “Farmers will agitate if they don’t get their payments. They won’t supply milk to us if they don’t get their payment. Today, there was an agitation by farmers at the dairy who are demanding cash payments.”
About 70,000 farmers are affiliated to RDCMPU, which procures four lakh litres of milk each day.
However, Gujarat Cooperative Milk Marketing Federation’s (GCMMF) managing director RS Sodhi said the situation will be stabilised in one week. GCMMF, which sells its products under the Amul brand, is the umbrella organisation for all the dairy cooperatives in Gujarat. Speaking to FE, Sodhi said, “Before demonetisation, we disbursed R450 crore per week for the dairy farmers associated with us, and 98% of these were by cash. At present, about 60% of farmers have bank accounts. There are some troubles in Saurashtra and places where farmers are not in favour of accounts but we are advising village cooperative societies to help farmers open accounts. Several banks are also holding camps in villages where farmers don’t have accounts. However, these are all small issues and procurement is not suffering.”