APMCs tell onion farmers to take same-day cheque payment only

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Agriculture Produce Market Committees (APMCs) at Lasalgaon and Pimpalgaon — the biggest wholesale markets for onion — have begun to exhort farmers to accept same-day cheque payments after complaints that traders were forcing farmers to accept post-dated cheques.

APMCs in the Nashik region, including Lasalgaon and Pimpalgaon, have now gone cashless after observing shutdown for over 10 days following demonetisation. Traders in these markets are now making payments through the banking system instead of cash. Initially, however, farmers were forced to accept the old currency notes and after that there has been an increasing preference for cheque payments. Officials admitted that traders initially made payments in post-dated cheques and farmers had no option but to accept those. Things have changed since and before the auction every day, the market committee cautions farmers to accept same-day cheque payments. Dilip Bankar, chairman, Pimpalgaon Baswant APMC, agreed and pointed out that although farmers are given the same-day cheque payments, these cheques take atleast 7-8 days to realise since there is no liquidity in the system. There is an oversupply of onions and no cash in the market and, therefore, it is natural that prices will fall, he said. This is affecting arrivals and since farmers need cash to pay labour for harvesting, there is again a problem, he said.

Interestingly, farmers do not trust the RTGS payment system and prefer cheque payments since they have something in hand to show their families, Bankar said. According to Lasalgaon committee officials, of the 50 traders only 5-6 traders opt for RTGS and NEFT payments while the remaining traders use cheques.

According to Nanasaheb Patil, director, Nafed, there have been several instances of traders forcing farmers to accept post-dated cheques and very few traders are using the RTGS payments. The market committee needs to remain alert to ensure that farmers are not duped, he said. Bankar said RTGS is used by traders only for large payments and most farmers prefer cheques. Usually, arrivals at this time of the year are around 2.5 lakh quintal a day and this has dropped drastically because of lack of liquidity in the market. Most agri-commodities have taken a beating because of lack of liquidity in the system. The government needs to make good the losses of farmers, he said. According to Patil, markets such as Satana, Umarana are flooded with onions and, therefore, farmers are forced to sell at low prices.

After a long weekend break, around 24,000 quintal of onions arrived at Lasalgaon on Monday with modal prices at R900 per quintal and 18,000 quintal arriving in the market on Tuesday with modal prices touching R850 per quintal. Market officials say the trend is more or less the same and the stock of summer onions has been exhausted now.