Odisha farmers in distress after demonetisation

Demonetisation of high-denomination currency notes has badly hit agricultural activity across Odisha as cash is the primary mode of transaction in the sector.

Bhubaneswar, Nov 30: Demonetisation of high-denomination currency notes has badly hit agricultural activity across Odisha as cash is the primary mode of transaction in the sector, which provides employment and sustenance to more than 60 per cent of the state's workforce.

"We are facing numerous difficulties while buying fertiliser and seeds from the market. The shopkeepers are refusing to accept the old notes. The farm labourers are also refusing to accept the old notes," Raghu Pradhan of Akushingi village in Rayagada district, told IANS.

And there is very little sign of the new notes in the state outside of the urban centres.

This is the time of the kharif harvest and the start of rabi sowing -- a busy season for farmers in a state where the agricultural sector is the mainstay of the economy, contributing about 15 per cent to the gross state domestic product (GSDP).

The state government apprehends that over four million agricultural families have been hit by the demonetisation drive, especially as the Centre has not allowed cooperative banks to exchange the scrapped Rs 500 and Rs 1,000 notes.

Chief Minister Naveen Patnaik has urged Prime Minister Narendra Modi to direct the Reserve Bank of India to review its decision of not allowing District Central Cooperative Banks (DCCBs) to exchange demonetised notes.

"We have requested the central government to ease the sufferings of farmers. We hope the government will take steps to provide relief to them," Agriculture Minister Pradeep Maharathy told IANS.

The Centre's move has made the farmers a worried lot at a time when they are yet to be paid last year's crop insurance dues and the government's financial aid for the severe drought that the state experienced.

What could compound their woes is that there are no banking facilities in over 4,400 panchayats in the state. The farmers in the non-banked villages are having trouble exchanging the old notes.

Even though the central government has announced that NABARD would provide Rs 21,000 crore ($3 billion) to the DCCBs for rabi operations, the fund is yet to reach the cooperative banks.

The fund will enable the DCCBs to sanction and disburse crop loans to the farmers through the network of Primary Agricultural Cooperative Societies (PACS).

"We have about 355 branches in the state. But we are unable to disperse loans to the farmers since we do not have the cash. Once we receive funds, we will disburse them. However, the delay will badly affect farmers and, subsequently, crop production," Ajay Kumar Mohanty, President of the All Odisha Central Cooperative Bank Employees Federation, told IANS.

Even though farmers have been allowed to purchase seeds with the demonetised Rs 500 notes from outlets belonging to the central or state governments, the fact is that most farmers depend on private outlets as government-run centres are few and far between -- and also because of the poor quality seeds that they stock.

The state government apprehends that production in 2016-17 could drop if the sowed rabi acreage reduces for want of enough seeds on time to exploit the adequate soil moisture.

The state has a cultivated area of 6.18 million hectares and the pattern of operational holdings is highly skewed with more than 91 per cent of these belonging to the small and marginal category and the average size of land holding being a mere 1.04 hectares.

IANS