The note ban dealt a double blow to potato farmers in Uttar Pradesh, and the market has still not recovered fully, leading to huge losses.
Mathura: It’s been a year since demonetisation but farmers in the ‘potato belt’ of Uttar Pradesh say they are still struggling to come to terms with the impact of the financial shock.
The sudden decision by the Narendra Modi government created a two-fold problem for farmers – their largely cash-based economy went dry and the drop in demand due to the note ban ensured there was an excess supply of potatoes, leading to a sharp fall in prices.
The farmers were badly hit – the cost of cultivation per kilogram of potatoes is about Rs 9-10, but they only received Rs 3-4 per kilogram this year.
At present, small and medium-sized potatoes fetch nothing in the market, and the biggest, best quality produce leaves the mandi at Rs 150 for every 50 kg bag (at Rs 3 per kg). In contrast, before the note ban, each 50 kg bag sold for Rs 450-500.
A large-scale problem
Uttar Pradesh is the largest producer of potatoes in India, accounting for almost 30 per cent of the entire country’s annual production of 48 million tonnes. In the districts of Mathura, Aligarh, Agra, Mainpuri, Firozabad, Etawah, Kanpur, Farrukhabad and a few others, the rural populace is predominantly involved in potato farming.
Potatoes are harvested in February and put in cold storage units. Then, they are gradually sold over the course of the year. But this year, even after cash came back into the system via new currency notes, a lot of the stock was still left over from the demonetisation period.
Calling demonetisation an “ill-thought” decision, Chaudhary Pushpendra Singh, president of the Kisan Shakti Sangh, told ThePrint: “It has been disastrous for farmers and the rural economy, which is mostly cash-based. The sucking out of cash led to the fall in prices of all crops and dairy products. The prices have still not recovered to the pre-demonetisation days, even one year later.”
Apart from the farmers themselves, even cold storage unit operators are struggling to recover their money, because excess stocks mean buyers have no incentive to book orders in advance.
“About 30% of the produce is still lying in our unit. The farmers have abandoned them and we are unable to sell it anywhere,” Neeraj Agarwal, manager of the Goverdhan Cold Storage Unit in Raya, Mathura, told ThePrint.
Cold storage units are now agreeing to the leftover potatoes at Rs 2 per kg, as they have to clear stocks, and traders take advantage of this situation.
Impact on related sectors
The impact on the potato market has led to a domino effect on the rest of the regional economy as well. Farm equipment manufacturing and trading, fertiliser trading, and other associated sectors are also affected.
Paraag Agarwal, a tractor trader in Raya, said his sales were down from 130 in 2015-16 to 62 in 2016-17, the financial year that witnessed demonetisation.
Mehwa Singh, who manufactures harrows, tillers and cultivators, said he sold just 160 harrows post-demonetisation, as opposed to 350 before.
This is the time of the year when the potato belt starts preparing for its crop for next season, and Pushpendra Singh has a piece of advice for the government. “The least the government should do is to immediately waive all loans to at least partly relieve farm distress,” he said.
Potato is the life for Indians . Only, South , may survive without .If the farmers are unable to cultivate potatoes on time and the previous year’s potatoes are lying rotten, in literal sense , what will the Indians , especially , the poor will eat even if they manage to procure Rice or Wheat . Moreover , how will the families of potato cultivators survive ? Jai Notebandi , Jai Modi .Jai Notebandi , Jai Modi .Jai Notebandi , Jai Modi .Jai Notebandi , Jai Modi .Jai Notebandi , Jai Modi .Jai Notebandi , Jai Modi .
There is Wheat production more in Mathura region. There are some farmers who did not even have accounts in private or big government banks. Most of the farmers in UP have account in UP Co operative bank and during ‘demonetisation’ these banks were barred by RBI to deposit money.