Demonetisation: Cotton ginners offer sops for bank payments but farmers a worried lot

Demonetisation: Cotton ginners offer sops for bank payments but farmers a worried lot
CHANDIGARH: Cotton ginners are offering higher prices for cotton if farmers accept payments in bank transactions, but there are very few takers. Farmers are holding back their crops and artisans involved in traditional businesses like the Punjabi juttis (shoes) have no time to work.
Many are doing rounds of banks but there are no complaints, said Parwinder Kaur, associated with artisans through self-help groups covered under Nabad-funded schemes.

Farmers needing valid currency notes to buy seeds and fertilisers are anxious. The restriction on play of cash has brought down daily trade of commodities starting from vegetable vendors. Anticipating delay in payments from traders, farmers have reduced the market arrival of cotton and paddy across states. Farmers have returned payments paid in cash to the commission agents at Khanna mandi in Ludhiana district.
It has hit the age-old informal credit from arthiyas or commission agents in Haryana and Punjab. Farmers are refusing to accept cash payments and many are returning old currency paid prior to the demonetisation, laments a commission agent in Punjab.

Some like Maharashtra-based ginners have begun offering premium of Rs 75 per tonne to cotton farmers who receive payments in their accounts. “We are organising workshops to encourage farmers to accept payments through banks,” says Pradip Jain, a Maharashtra-based ginner.
Black money and politics is the hot topic of discussion in the poll-bound state. The move has allowed higher moral ground to the Narendra Modi-led government on the issue of black money as against the Congress and the Aam Aadmi Party. “It has split mandate on the black money issue among those who believe in change and others favouring status quo in the situation,” says Pramod Kumar, director at Institute of Development and Communication, who had chaired the committee on Punjab Governance Reforms ..
“Political parties will make promises like debt waiver and power bill waivers, while gifts and indirect benefits after the polls will replace cash expenditure,” says Kumar.

Cash payments to farmers will boost income of farmers, says Vijay Sethia, president of All India Rice Exporters Association. He said the cotton industry will benefit from the move that restricts the role of middlemen. “It may affect procurement activities for a short period but will boost organised sector in the long term,” says Anil Mittal, chairman at rice miller and basmati exporter KRBL Ltd.

Makers of farm inputs like pesticides, farm equipments and seeds feel their sales will be normal. The farmer could cut expenditure on cattle feed, says an executive at Cargill Feed & Nutrition.
 

SOURCE: ECONOMIC TIMES