A month of Demonetisation, disaster for Agri business

08 December, 2016

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30 days of Demonetisation has rattled, the Agro business in India. Entire chain from farmers to wholesalers in mandis to processers, various mills, labourers working in them and retailers, all have been hit badly.
Farmers: Need cash to buy seeds, fertilizers and pay for inputs. They are unable to sell their mature crops being thrown on roads.
Small Units: Dal Mills, Gur industry, oil mills: the arrivals and processing dropped drastically. Most traders are very traditional and deal only in cash. They cannot operate on moderate cash transfers being advocated. Somehow they are managing by providing credit and hoping for things to get better.



  
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Gur Industry: Asia’s biggest Gur mandi is badly hit with trade coming to stand still. Crushers are unable to pay cash to the farmers. Gur being traded Rs 4000/quintal to Rs 4200/quintal had come down to Rs 2500 per quintal. Arrivals have dropped sharply because of poor crushing. Trader bodies are resorting to demonstration and taking up matter to district administration. Law and other problems are emerging, could intensify.
Onion: In Lasalgaon, onion auctions had to be stopped. Farmers are worst suffers.
Oranges: In Nagpur, at Chandrapur Mandi the arrivals of oranges dropped from 1380MTS to 300 MTS. Other small units processing honey and Alovera juices, Rose water are not able to sell their products or get the raw materials for processing leading to closure of the units.
Fresh fruits and vegetable: Mandis in Moradabad, Najibabad are suffering as arrivals have dropped by 70%.
Rice: Mandis in Punjab and Haryana which handle 80% of India’s Basmati Rice production are in crises. Because of lack of cash traders are unable to buy. Eventually the export of Basmati rice will suffer.
Decision of Notebandi has hit the Agri business and has inflicted irreparable losses to everyone in supply chain. As agro products being perishable are lost forever.



  
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