Rural economy still trying to put the notes together

BHANDRA: Narain Rabari, a nomadic shepherd from Gujarat, has been roaming around the hinterland of Vidarbha since decades, but the only bank account he has is in his native village at Kutch. After November 8, when Prime Minister Narendra Modi demonetised Rs 1,000 and Rs500 notes, he rushed to Kutch, with many others like him, to deposit the scrapped notes, and returned with a meagre amount in valid currency.“The bank was permitting only limited withdrawals,” he said.
A little ahead, village women working for a highway contractor said they had not got wages since the last two months. Both these places are just 30km away from Nagpur, but life has got a lot tougher due to demonetisation.
These two were one of the many hit by demonetisation that TOI met while travelling into a part of the region’s paddy belt, which extends from Mouda taluka in Nagpur till Gondia, nearly 200km away. This region has remained insulated from farmers suicide so far, but the economy remains squeezed here too due to demonetisation.
Rates of paddy have come down by Rs400 to Rs600 a khandi (1.5 quintals, a measure for paddy). As against Rs3,000 to Rs3,200 last year, farmers are getting only Rs2,600 a khandi, which too the traders are buying reluctantly. The rates are expected to go down further.
Earlier, payments were made in cash. Now, being forced to give cheques, rice millers say they cannot afford the old rates. Farmers have no choice but to agree.
Even though the cheque might be of a higher amount, once deposited, banks allow withdrawal of only Rs2,000. “Most of the times, it is a single Rs2,000 note which is of no use,” say the locals.
The cascading effect of the cash crunch has left those at the lowest rung worst hit. With less money from traders, farmers are unable to pay wages to labourers engaged in the fields, who have to settle with whatever little they get.
“The last two months have been very tough. Farmers show the Rs2,000 note, saying that is all they have. We used to get a weekly wage of Rs700, but now we have to settle for a couple of hundred,” said Jasunda Bhongade, a farm hand on her way to work with others.
At Borgaon near Bhandara, Harichand Gorle pointed to his paddy field, saying, “It’s time to harvest but the crop has not been cut. Traders, who are low on cash here, are not ready to buy the produce and the rates are already down to Rs2,600 a khandi.”
Gorle owns a 20-acre farm. “Tension with Pakistan has already taken a toll on chilli exports, and the rates have been halved to around Rs300 a quintal,” he added.
“Traders say they can only pay in cheques, but even then the entire dues are not cleared in one go. Giving cheques of smaller amounts, traders claim they don’t have any money in the banks too,” said Vijay Dhoble, another farmer from Borgaon.
“The rice millers are cashing in on the situation and have slashed buying rates blaming demonetisation. Farmers are in need of money,” said Shubham Dharve of Jan Seva Rice Mill at Dawdipar Bazaar village on Pauni Road, a little beyond Bhandara.
Nearly half of the people TOI spoke to in villages like Dawdipar Bazaar, Chandor and Pachkedi, 15km past Bhandara city, had not seen the new Rs500 notes. The nearest bank for those living here is in the city. Hiraman Rabade, a farmer who flashed a Rs500 note, said he got it from a trader a week ago.
“Farm labourers are the worst hit. A number of women work in the fields or are engaged through private contractors in the forest department, and none of them have not got their wages. Such families have hardly any surplus cash in their hand and are just about managing to make ends meet,” said Sailesh Nimbarkere, ex-sarpanch of Chandori.