The state government has decided to route subsidies through direct benefit transfer to help farmers, facing a severe shortage of cash because of the demonetisation, procure fertilisers, farm equipment and seeds. For this, the government has introduced a simple form, which the farmer has to submit in bank stating the amount required and purpose. By showing the acknowledged receipt to dealers, farmers can procure fertilisers, seeds or farm equipment.
The decision was taken in the wake of currency shortage in banks, leaving farmers with very little cash to make purchases. Chief Minister Devendra Fadnavis held a meeting with financial institutions and the ministry of cooperation and markets to bring several policy reforms to tackle the unrest in the hinterland ahead of the rabi season.
The state government will route the subsidies to banks, which would directly make the payments to dealers. Farmers using the forms will be saved the ordeal of waiting for cash or standing in long queues.
Sensing the challenges ahead as the Centre issued a clarion call for cashless transactions, the state government is exploring ways to tackle the challenges.
According to the NABARD status report for 2015-16, “Almost 31 per cent of the population in Maharashtra is in non-banking sector.” Or, the non-banking sector accounts for 76 lakh people, of which 48 lakh are in rural areas and 26 lakh in urban areas. The state’s population is 11.23 crore.
Another concern relates to increasing the penetration of the nationalised banks in rural Maharashtra. Today, 80 per cent of farmers operate through the District Central Cooperative Banks. There are 35 DCCBs with a network of 5,000 branches across Maharashtra.
The RBI’s directive disallowing individuals from depositing cash in DCCBs too has caused financial hardships to farmers. Although NABARD has been asked to infuse Rs 21,000 crore in the DCCBs to provide easy crop loans to farmers, a source said, “The absence of infrastructure to deal with cashless transactions on one hand and lack of adequate cash on the other has impacted farmers.”
The state has 2 lakh swiping machines and has sought 2.5 lakh more from the Centre.
A district collector from the Marathwada region said, “The demonetisation has affected the flow of money, hitting farmers of perishable crops. Farmers in the flower sector are forced to accept 50 per cent less price.”
A bundle of “jerbera” flowers that fetched Rs 10 earlier is now going for Rs 4.50 to Rs 5 in villages. Similarly, other crops are also being undersold. “Directives have been issued to make bank accounts mandatory in rural villages,” said an official.