With district central cooperative banks running short of valid currency caused by demonetisation of currency in the denomination of Rs. 500 and Rs. 1,000, coupled with the government-imposed limit on the amount of transactions in banks, over 41,000 small milk producers across the rural areas of Hyderabad Karnataka region are forced to manage their households without payment for the last two weeks.
Though the Karnataka Cooperative Milk Producers’ Federation Ltd (KMF) is making payments to societies online as usual, the milk societies that procure milk at village level are unable to make weekly payments to milk suppliers.
Kalaburagi Milk Union, under which Bidar, Kalaburagi and Yadgir districts fall, procures around 57,000 litres of milk a day from around 10,700 farmers and makes payments to milk suppliers on weekly basis. However, it could not make payments — about Rs. 1 crore a week — farmers for the last two weeks.
“As per the Union government, a person or cooperative society can draw maximum of Rs. 24,000 a week. It is insufficient to make payments to all milk suppliers. The milk societies have therefore stopped payments to farmers for the last two weeks. I have been receiving a number of calls on the payment-related grievances and rushing to those places for redressing them,” Manohar Kulkarni, deputy manager, Kalaburagi Milk Union, told The Hindu on Friday.
DCC bank officials were saying that the issue of currency shortage would hopefully be resolved by Monday, he said.
Some milk societies that had adopted online mode of payment to their suppliers well before the demonetisation are at ease. But their number is too small. As per the information provided by KMF officials, of 355 functional milk cooperative societies under Kalaburagi Milk Union, only 15 have adopted online mode of payment.
Upon the pressure from the Ballari Milk Union, which procures over 2 lakh litres of milk a day from around 30,500 milk farmers spread across 605 unions in Ballari, Koppal and Raichur district, Ballari DCC Bank has taken up an account opening drive among milk producers so as that it can disburse the payments online.
“If all the milk producers have their back accounts in rural district cooperative bank, their payment can be made through online transfer. But, they have bank accounts in various nationalised banks and DCC banks don’t have facility of Real Time Gross Settlement. Upon our request, they have now started bank account opening drive among milk farmers so that they could make online payments within next two months,” Marulu Siddappa, Assistant Manager at Ballari Milk Union told The Hindu .
In some societies, milk farmers without bank account are advised to open accounts so that their dues and future payments can be made online. "Opening a bank account is a tiresome job for them as bank staff are busy with exchanging demonetised notes working overtime," said an officer.
DCC banks plead helplessness in the matter. “Even if we have enough currency notes in the denomination of Rs. 100 or lesser denomination, we cannot allow milk cooperative societies to draw more than Rs. 24,000 a week as per the government directions,” Sidramareddy Patil, chairman of Kalaburagi DCC Bank, told The Hindu .
If there were no restrictions, he added, there would be a good recovery of loans in the banks.
KMF officials criticise the Union government for not exempting cooperative societies from restrictions of money transactions at banks. “At least now, the government should either exempt the cooperative societies from transaction restrictions or allow them to draw such amount of money that they require for clearing dues to milk suppliers every week,” Nagappa, an officer working with KMF in Bidar said.
(With inputs from M. Ahiraj in Ballari)
