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Demonetisation: Cane farmers survive on credit but it is a crisis for farm, factory labourers

Demonetisation: Cane farmers survive on credit but it is a crisis for farm, factory labourers


MEERUT: At Modi Sugar Mills in Modi Nagar, Krishan Kumar is waiting to unload sugarcane from his buffalo cart. He is concerned about the cash crunch but says farmers are resilient.

“I have yet to get Rs 3 lakh for sale of sugarcane sold last December but sill surviving on credit. We will manage this phase too,” says Kumar, who has come with 20 quintals of cane at 3am.

He is happy with Prime Minister Narendra Modi’s decision to discontinue old higher denomination currency notes but is struggling to strike a balance between cutting his sugarcane crop and standing in queue at bank.
Things are much worse for small and tenant farmers and daily labourers in the rural belt towards Meerut, an ancient city in western Uttar Pradesh. Those who grow seasonal vegetables, flowers and other crops in an area less than 1-2 acre have seen sales halve.
Surinder has rented over 1 acre (6 bigha) of land in Niwari village near Modinagar town in Ghaziabad district of Uttar Pradesh for an annual rent of Rs 30,000 to grow sugarcane and marigold. He has not received money from the sugar mills for the previous year and says demand and price for flowers has come down for temples and weddings. Unable to sell 3,000 kg of the marigold in Delhi, he says if he can get some money, his priority will be to buy fertiliser and wheat seed.
“I will make a partial payment to my labourers and buy sugar and oil for my family,” he says. Like other landless farmers, Surinder is also unable to borrow money from the organised financial sector for seeds, pesticides and fertilisers.
However, Surinder’s neighbour Manoj Tyagi, who owns 10 acre, feels there was no challenge in the rural market. “I have 200 quintal (1 quintal=100 kg) wheat and 1 quintal rice in my house. I will accept sugar from the mill instead of cash this time against my sugarcane sale. Our need for milk and dairy products is met by our two buffaloes,” says Tyagi, who is in favour of demonetisation to get black money and fake currency out of the system.

For small and landless farmers, long queues at banks and disbursement of less currency than stipulated by the RBI are proving dampener in the sowing season. Those who are able to withdraw cash are also suffering since banks offer Rs 2,000 note rather than the lesser denomination currencies and coins instead of cash. In rural areas, banks often do not follow regular banking hours, especially when they run out of cash.
The labourers in farm and factory who get Rs 300-500 per day are not getting credit from shopkeepers, who are not confident about repayments even after a month in view of cash crunch in the market. It has compelled many to reduce their consumption of milk and chicken or mutton and even sell household items, says Bijendra, who works as a daily labourer in Modi Nagar.

Farmers are even cutting costs of cattle feed, says farm labour Rajendri from village Jagatpuri, who cuts sugarcane in exchange of green stock instead of wages. She is unable to find dairy farmers to purchase a bunch of green stock at Rs 10 for 2-3 kg.

On a normal winter day, fresh gur from Mangu Singh Tyagis kolu (jaggery making unit) would sell like a hot cake. He is unable to sell his produce to retailers in neighbouring villages and Muradnagar’s jaggery mandi that is on strike to protest against demonetisation.

With rural banks unable to dispense the stipulated amount suggested by the RBI to farmers, the village economy is being impacted, says Virendra Singh, a farmer from Rohta village on the outskirts of Meerut city. “I have postponed wedding of my son, who was get married on December 8, since I am unable to withdraw either from the cooperative bank or the local public sector banks (PNB and Syndicate). I had kept a budget of Rs 15-20 lakh to entertain 1,000-1,200 people and buy jewellery for my daughter-in-law,” he says.

According to Bajaj Auto sub-dealer Rajeev Shandilya, sale of bikes has not taken off despite the wedding season due to the cash crunch. Since the beginning of this month, he has been able to sell only five bikes, of which two were sold on credit. Shandilya is not hopeful to achieve his target of 20 bikes for November.
Irshad, a furniture shop owner, says he has never seen such a slump during the wedding season.

In Meerut city, fertilizers, pesticides and seed traders say bulk sales have slumped even as the peak season of sowing has set in.

“So much time is wasted to get your own money,” says Suresh Chand Gupta of Kaiser Ganj Road in Meerut city, who had sent his son to the bank to withdraw money. “80% of the products being sold are on credit to dealers in villages. In the current scenario, we are just making daily need purchases and nothing extra.”
The Rs 7 a cup of tea is also proving to be costly in the Kaiser Ganj market, which is the main arterial business road of the city. Tea vendor Vijay Kumar quips that from an average purchase of 5 litre milk to make tea, he is now only getting 1.5 litre, as customers—shopkeepers, farmers to labourers—have cut down their tea intake. “I have no money left to buy biscuits, chips, and for once, consumers are not complaining,” he says.



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