Demonetisation: In planting season, trust and credit in full bloom in fields
PUNE: Dnyaneshwar Gavande, a farmer in Maharashtra’s Mhaisang village, didn’t have cash but managed to plant gram on his eight-acre farmland on time. All inputs adding up to Rs 35,000 were on credit.
Villagers have even managed to hire farm labour without paying any cash. They simply request the village kirana store owner to give groceries on credit to the labourers on their personal guarantee.
“Chana (gram) seeds were very expensive, but my cousin had some so I could borrow from him and plant those seeds,” Gavande said.
Villagers across the country have similar stories to narrate, whether it is Punjab, West Bengal or Uttar Pradesh.
They are betting on trust and credit to ensure they don’t miss out on planting crops in time, helping the country’s crop planting expand 35% in the week to November 25 and another 27% in the following seven days, according to data from the agriculture ministry. Overall crop planting is 9% higher than last year.
In a sense, rural India has learned to live without cash and is even applauding the withdrawal of high-value notes. But villagers have not adapted to the banking system, yet.
Instead, they are leaning on the agesold credit system in the hinterland where people know everybody by name and have a traditional system of purchasing on credit and paying at the time of harvest.
People deemed creditworthy by local shopkeepers and villagers have managed to get seeds and other inputs on credit.
Those who are too small to have any credit in their local area have been suffering, with their sowing delayed and crop care affected adversely for want of inputs.
Some farmers are uncomfortable taking debts as this involves higher costs. Farmers say local shopkeepers generally sell things at a discount to the maximum retail price.
Small farmers paying price
Villagers say items bought on credit are charged a smaller discount to the maximum retail price.
Jyoti Deshmukh, whose husband, brother-in-law and father-in-law committed suicide in recent years, singlehandedly cultivates the family’s 29-acre farmland. Bereaved thrice due to indebtedness of family members, she does not like the idea of borrowing.
“I was lucky to have some saved seeds, but I had to get fertiliser on credit,” said Deshmukh. Farmers say this credit and trust-based cashless society has a cost, being borne by the small farmers.
“When we are buying on credit, we are being charged a much higher price than those who pay in cash. The interest burden will go up,” said Manoj Tayade, a farm activist from Akola.
How long will the system run on trust and credit? Villagers want the cash economy back because their first experience with banks — waiting in queues or trying to encash cheques — has not been pleasant.
Despite all the suffering, many people still support demonetisation, hoping it will lead to better days. However, if things do not improve after December 30, as promised by the prime minister, the slowly growing frustration is likely to explode.
“I do not know how to manage day-to-day expenses at home,” said Sanjay Banerjee, an employee of the West Bengal government who was disappointed that a UCO Bank branch near Kolkata had run out of cash. “Twenty-three days have passed by since demonetisation was announced. But I can’t see the situation improving.
PM has sought 50 days. We will have to wait till December 30 and have to manage somehow,” he said.
Gavande of Mhaisang village said, “People have not resorted to riots as trust and credit helped carry out transactions. If things do not improve as promised, the anger will certainly go up.”
Source: ECONOMIC TIMES