Cash fear hits paddy plan - Farmers sell produce at lower rates in currency crisis

Pranesh Sarkar and Snehamoy Chakraborty, TT, Dec. 19: An apprehension about availability of cash in rural banks and a delay in harvesting the monsoon produce in the absence of enough currency notes have hampered the Bengal government's plans to procure paddy from farmers.

"The government has allotted Rs 5,000 crore to start the procurement process so that farmers are not forced to sell their paddy at lower rates. The registration of farmers started across 280 blocks on December 10. But the response has been lukewarm," said an official in the food and supplies department.

The official said primary reports from various districts had revealed that only about 1.5 lakh farmers had registered themselves for the procurement process, which is around 25 per cent lower than that in the first week of registration over the past few years.

"We have a target of procuring paddy from 10 lakh farmers. Over the past few years, around 2 lakh farmers had been registering themselves in the first week itself," the official said.

Under the process, once a farmer registers himself at a procurement camp, he is given a date to bring his paddy. After the government procures the produce, the amount is transferred to the farmer's account. This year, the government has fixed the minimum selling price at Rs 1,470 a quintal.

The officials said though many farmers had visited the procurement camps, most left without registering themselves after learning that the money would be transferred to their bank accounts. Until last year, the government paid in cheques.

"All of them want to be paid in cash. But we cannot give them cash as the system does not allow us to do so," an official in the Birbhum administration said.

According to sources, the farmers require liquid cash to invest in the rabi season, which goes on till March. As they are not sure about getting enough money from the banks, they have started selling their produce to local aggregators at lower rates.

Many farmers in Burdwan and Birbhum have not been able to harvest their entire produce because they are finding it difficult to get labourers in the wake of the currency crisis. Labourers across rural Bengal are paid in cash on a daily basis.

Many farmers expressed helplessness about stacks of paddy lying in their barn and getting damaged by pests and rats. Once harvested, paddy needs to be threshed, which requires hiring of labourers.

"The local aggregators are offering something between Rs 1,180 and Rs 1,200 a quintal in the districts. The farmers are accepting the amount as they are being paid in cash and they need liquid money to invest in the rabi season," a source said.

According to some farmers in Birbhum and Murshidabad, local banks have been allowing withdrawal of only up to Rs 4,000 a week. The ceiling is lower in co-operative banks, where a majority of the farmers have their accounts.

A farmer who returned from the camp without registering himself rued that had he sold 15 quintals of his paddy to the government, he would have got Rs 22,050 at the rate of Rs 1,470 a quintal.

"But it will take a month to withdraw the money from the bank. So I did not register myself at government camp this year," said Radhamadhab Saha, a farmer in Rampurhat's Radipur village.