Demonetisation & drought

Print edition : February 03, 2017

THE impact of Prime Minister Narendra Modi’s November 8 demonetisation on the drought has not got the attention it deserves. S. Ranganathan, secretary, Cauvery Delta Farmers’ Welfare Association, questioned the timing of the announcement. “Demonetisation of Rs.500 and Rs.1,000 notes should not have been announced during the crop season. Agricultural operations have suffered because there is no money,” he said.

The hardest hit were farmers who used ground water and initiated the cultivation of paddy, sugarcane, sorghum, maize, turmeric, cotton and various vegetables. They suddenly found that they had no money to buy urea for top-dressing the soil after it had been irrigated with ground water. Those who had land holdings of a few hundred acres and employed labourers found that they had no money to pay those who tilled the land. The withdrawal limit of Rs.24,000 a week was hardly enough for them to pay the workers.

The absence of money circulation also meant that farmers were unable to pay the premiums for their crop insurance in district central cooperative banks or primary agricultural cooperative credit societies. Furthermore, these two institutions continue to remain inoperative in rural areas even two months after the demonetisation was announced.

P.R. Pandian, president of the Mannargudi branch of the Tamil Nadu All Farmers’ Associations’ Committee, said on January 12 that there was no money circulation at all in villages consequent to the demonetisation. “All business activities have been crippled,” he said. “Nobody is able to buy or sell land. We are not able to get loans from cooperative banks. When the government announces drought relief measures, we are not able to avail ourselves of the relief from the cooperative banks. We are not able to get the subsidies the government has announced on diesel and urea from the cooperative banks,” Pandian said. The farmers were also not able to get the loan amounts sanctioned by the cooperative banks. Besides, all ATMs were non-functional in rural areas. In sum, business and trading activity had come to a halt in the rural areas, he said. There is a sharp decline in customers in tea stalls, and there are fewer passengers travelling in buses, said G. Ramadoss Naidu, a farmer of Vidangalur in Nagapattinam district.

The loss of income in the wake of the drought has also contributed to the loss of business in grocery shops, textile stores and so on. “I have been sitting idle all day,” said a grocery shop owner around 8.30 p.m. at Keezh Tirupanthuruthi village in Thanjavur district. In Mannargudi town, K. Sankar, who runs the popular Iyengar Coffee [stall], said, “There is a terrible drought now. My business has come down sharply.”

Hulling mills are reporting a drop in the arrival of paddy. This has driven up the price of the 62-kilogram bag of paddy. The price of rice is bound to go up in the coming weeks, say rice mill owners. B. Saravana Kumar, a rice mill owner in Thanjavur district, said paddy yield had fallen sharply. If a 62-kg bag of paddy was sold at Rs.800 to Rs.835 last year, its price has now gone up to Rs.1,050. “The starting price is Rs.1,050. It goes up to Rs.1,250”, he added. If a variety of “fat” paddy called CR1009, popular in Kerala, was priced between Rs.770 and Rs.790 for a 62-kg bag, the starting price for it was Rs.1,000 now. It would be converted into rice in the mills in Tamil Nadu and sold in Kerala, he said. The base price of the thinner variety of PPT paddy was Rs.1,050 and it went up to Rs.1,300. “The demand for paddy is high this season. But there is virtually no supply,” Saravana Kumar said.

Another major fallout is the increase in migration of labour from villages to towns as avenues of work dry up. For instance, agricultural workers in the Cauvery delta districts were now migrating to other districts where some farming with the help of ground water was under way. Agricultural workers in the villages around Mannargudi were looking for jobs in beer-manufacturing plants in the region. They were also travelling to Kerala to find employment in tea estates and cardamom plantations, and to Andhra Pradesh to find work at construction sites. The drought has hit hard the Dalit agricultural labourers who form a sizable presence in Nagapattinam district. “These labourers have lost an income of about Rs.10,000 a month,” a landowner said. The dry conditions have also affected all the bird sanctuaries in the State. In Tiruvarur district, Vaduvur lake has just a few patches of water. The lake is home to just a few hundred birds now when it should have been teeming with several thousands at this time of the year. Five bird sanctuaries in Ramanathapuram district and one in Sivaganga district have had no winged visitors.

T.S. Subramanian

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