Farmers are
calling it a cruel irony. After two, in some areas three, successive drought years and failed harvests, in the 2016 kharif
seasons the rains were adequate and
crops decent. The farmer looked forward to some money, to repay outstanding
loans, prepare properly for the next crop and plan his life a little ahead.
Then the government announced
demonetization in the first week of November and all the money left the
market. This is the time when the kharif
harvest, largely paddy, had been threshed and bagged and was ready to be sold,
except there were no buyers. The traders in the mandi did not have the money to
buy the farmer’s grain because everyone’s money had been declared illegal. The
government did not print enough new money so the banks had no money to give
traders (or anyone else) to buy the farmer’s grain. What has been particularly
hard is that after two bad years, demonetization snatched away the opportunity
for a modest recovery.
Harvest time
is the best time in the farmer’s life. The results of his efforts come home and
this is the time to pay off loans, repair a leaking roof or even build an extra
room for the son who will get married. Yes, post-harvest is also the time when
marriages take place.
Worse,
district cooperative banks where small farmers normally bank had been debarred
from exchanging old currency , withdrawing or depositing money. So farmers
could not use their accounts. With their accounts frozen, they were unable to
make repayments of loans they had taken, even as the interest kept mounting.
The government later announced some convoluted steps to attempt to ameliorate
the situation but we will need to wait and see what comes of it.
The
government’s reasoning was that the cooperative banks did not have systems in place to ‘Know Your
Customer’ (KYC) and could hence become conduits for “black money” deposits. But
this is not really true. Lakhs of farmers have fulfilled KYC requirements and
have been using the government’s Kissan Credit Cards. The unreasonable biased
action against district cooperative banks was discrimination at its worst and
it dealt a big blow to farmers and to the rural community.
Nearly two
months on from the first distress sales of the paddy harvest, reports come in
everyday of farmers unable to sell their fruits and vegetables at a semblance
of a remunerative price.
In
Telengana, tomato farmers failed to sell their produce in the vegetable market
in Hyderabad. Some dumped their tomatoes right there because they could not
even recover the cost of transporting the tomatoes from their farms to the
market.
This was allegedly done because many of these
banks do not have systems in place to ‘Know Your Customer’ (KYC). But this was discrimination at its worst and
it dealt a big blow to farmers and to the rural community.
