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The recent demonetisation of high value currency has not only hurt farmers but also hit the warehousing industry hard. The Government’s move to demonetise ₹500/1000 currency notes has come when the arrivals of major kharif crops such as soyabean, groundnut, pulses and cotton are starting to arrive in the market.
Prices of most of these crops are trading at discount as wholesalers and brokers who buy the produce from farmers by paying cash and then store it in the warehouses are not able to execute deals due to shortage in cash circulation.
Anil Choudhary, Managing Director, National Bulk Handling Corporation, said it is about a month since demonetisation was implemented but there is no sign of normalcy returning anywhere soon in terms of volumes at the warehouse level, he added.
“Looking at the good monsoon we anticipated that our warehouses would have inwards of ₹200-250 crore a day, but it is only about ₹100-150 crore now,” said Choudhary.
Farmers are in a fix as they are set to harvest highest-ever food grain production of 270 million tonnes amidst the havoc played by demonetisation. The huge import of agriculture produce such as pulses and edible oil has caused strain in economy and farmers raised to the call given by the Government to grow more pulses and oilseeds. Ryots were expecting that the stress caused due to two consecutive year of deficient monsoon will disappear. Owned by India Value Fund, NBHC manages assets worth ₹87,600 crore for 54 banks and has over 2,000 warehouses across 23 States. It manages 34.70 million tonnes of agriculture commodities.
Arrivals of major kharif crops such as paddy, soyabean, groundnut, cotton and pulses in Punjab, Haryana, Rajasthan, Madhya Pradesh, Maharashtra and Gujarat have been impacted. Large transactions in soyabean, one of the important kharif crops in Rajasthan, Maharashtra and Madhya Pradesh, are delayed due to the cash crunch, said Choudhary.
Knowing well that they will not get payment in cash, farmers are holding back soyabean which has a longer shelf-life. Even if farmers are willing to take payment by cheque, they are finding it difficult to pay cash for meeting expenses such as transportation and labour due to withdrawal limits. The current trend may impact rabi sowing though the Government has allowed farmers to buy seeds using demonetised currency notes, said Choudhary.
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