After drought, demonetisation puts Marathwada farmers on the edge

After the dry spell Marathwada witnessed for four years, the rain gods were generous to the parched region this year. All eight districts in the region received excellent rainfall in 2016, and almost all the major and medium dams including Manjra, Ujani and Terna were overflowing for the first time since 2010.

Riding on the prosperous outcome of good rains, many farmers also got a bumper crop this year. But most of them are now hit by the demonetisation drive. The lack of cash at markets and traders' refusal to accept old currency are resulting in a huge setback for the farmers.

In Harsul village of Aurangabad district, Narayan Surey, a young farmer, is worried as 100 quintals of his corn harvest lie idle with no buyers. Narayan, also an amateur wrestler, is angry with the demonetisation drive.

The earlier lot of corn fetched him Rs 75,000, but he was paid in cheque. The Surey family now awaits to withdraw the money, but the long queues at banks aren't allowing him to do so.

"What shall I do now? This 100 quintal corn is lying here and I will not be able to sell it. I got a cheque of Rs 75,000 for the earlier crop, but that money will be now lying in the bank as I will not be able to withdraw the money and use it for the next sowing season."

Surey is one of the many farmers in Marathwada who are bearing the brunt of demonetisation. Around 120km from Aurangabad, one of the biggest cotton markets at Ambad in Jalna district, is closed for last 8-10 days. Every day, this market witnesses a trade of around 500-600 quintals of cotton. But when we went inside the deserted market, we saw traders turning away cotton growers, especially the smaller ones.

Nitin Kamble, who lugged a small quantity of cotton on his motorcycle, did not find buyers. He was sent back. Small quantities are not finding any takers because they need to be paid for in cash. Cotton comprises a major part of farmers' incomes in Marathwada.

Almost 80-85 per cent of the income farmers get is from cotton. This year, after many years of battling the drought, farmers got a good yield of cotton, as well as a decent rate of Rs 4,900-5,000 per quintal. But in spite of such a favourable situation, farmers are not willing to reap the benefits.

Given the deep roots of the cooperative movement in Maharashtra, the District Central Cooperative Banks (DCCB) are considered the backbone of the state's rural economy.

The RBI has stipulated that DCCBs and Primary Agriculture Credit Societies (PACS) can allow existing customers to withdraw up to Rs 24,000 per week from their accounts until November 24.

It has said no exchange facility against the specified bank notes (Rs 500 and Rs 1,000) or the deposits of such notes should be entertained by DCCBs. Most of the farmers have accounts in DCCBs. It has advised all banks to permit the withdrawal of cash from their accounts based on need. Besides accepting deposits and providing production and marketing loans to their members, DCCBs also provide financial support to societies such as primary agricultural credit societies and the producers' cooperative societies.

"It's a catch-22 situation for the farmers hence, either accept cash, that too in old denomination and deposit in banks standing in long queues or accept cheques and again stand in long queues. In any case they are not getting cash for the daily use. Small and marginal farmers in Marathwada are hence facing the brunt," said Sanjay Kalbande, who runs a PAC in Ambad.

"We ourselves can only withdraw a cash of Rs 10,000 per week, how will we buy cotton from them? We have a lot of small farmers who sell small quantity of cotton, we cannot pay them cash." said Dada Shelke, a cotton trader.

Several groups, including political parties, have urged the Centre to withdraw the restrictions on DCCBs so that the woes of farmers end. In Marathwada, which has witnessed more than 400 farmer suicides in the last one year alone, farmers are hoping for some respite.