Ram Singh (name changed), a 45-year-old farmer near Ranjim, a tehsil in Chhattisgarh, stood impatiently in the long queue, waiting for his turn to swap a bunch of old notes for new. “I don’t want the new notes. I’m desperately looking for ₹100 notes that I need to pay to the labourers that I have employed. But, the amount is woefully low for my needs,” he said.

This is the story of many farmers in the country as they spend days in queues at ATMs and at bank branches.

The farming community is rattled. The demonetisation drive has impacted them on several fronts. As kharif harvesting is under way, they are facing a severe cash crunch. Labourers and transporters are insisting on immediate payments, and they also require cash for their consumption needs.

Horticulture farmers, particularly vegetable farmers, are still more worried as they see a sudden dip in demand. Given the perishable nature of the produce, a solution evades them. Farmers seeking to sell their produce in Rythu bazaars are not able to find buyers.

“They have exempted petrol pumps from the drive for now. But what about the fee charged by the transporters? All the paddy that is harvested is lying in the fields. To move it to millers and godowns, you need new currency, which is in short supply,” Yerneni Nagendra Nath, President of Rythu Sangham, told BusinessLine .

“As it is we are not finding enough labourers to handle the harvest season. Most of them are busy depositing their savings and are not available for work for the last one week. Even if they turn up, they expect us to pay in ₹100 notes by the evening,” he pointed out.

Vijoo Krishnan, National Joint Secretary of the All-India Kisan Sabha, termed the demonetisation decision a knee-jerk move. “The decision coming in harvest season has led to further distress for farmers who are already in a deep crisis. Agricultural workers are not being paid wages,” he said. “The decision has led to chaos in the lives of farmers and rural poor. We found huge, winding queues outside banks in all States. Ready availability of cash for working capital needs has been severely disrupted,” he added.

Income-tax woes

Also worrying the farming community are the likely missives from the I-T Department if they deposit huge sums. Though the Centre has given assurances that agricultural income is not taxed, they are anxious about possible I-T department inquiries.

“There is a dichotomy in what the government says. On the one hand they are saying there will be no tax on agricultural income. But, on the other, they have said they (farmers) will be questioned on higher deposits. We will get no receipts when we sell the produce in the markets,” pointed out Ravi, a farmer from Nizamabad.

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