Amul's efforts to go cashless get demonetisation boost

Responding to persistent requests from the dairy giant, Gujarat govt had issued a circular to transfer cash directly to farmers' account on Nov 5

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Amid the crisis in the milk economy created due to a cash-starved logistics chain in a post-demonetisation India, co-operative dairies are happy that they had pushed for cashless transactions to milk farmers just at the right time. In fact, while the drive has been ongoing since more than a year or so, as luck would have it, the Gujarat government had issued an advisory to district milk unions to turn all transactions on milk to the bank.

If one delves a little deeper into the scheme of things, the Centre has been encouraging direct transfer of money to the farmers' accounts through several schemes, like the e-National Agriculture Market (e-NAM), for sometime now.

Gujarat houses the country's largest dairy cooperative Gujarat Cooperative Milk Marketing Federation (GCMMF), which sells milk under the Amul brand. The cooperative giant works with over 3.6 millon farmers who are affiliated to over 18,000 village cooperative societies who together handle around 17 million litres of milk per day.

R S Sodhi, managing director of GCMMF explained, "We have been discussing since long with dairies to go cashless in terms of transactions, however, there was resistance from the secretaries etc. So, we have also been requesting the government of Gujarat to intervene and send an advisory in this regard."

A state government source too confirmed that an advisory or circular in this regard, dated November 5, precisely three days before Prime Minister Narendra Modi announced the massive demonetisation move involving Rs 500 and Rs 1000 currency notes, was issued by the state government. Dairy cooperative sources claimed that now they are using this circular to push farmers to open bank accounts and accept payment in their accounts.

Commenting on whether this was a tip-off from the state government right ahead of the demonetisation drive, Sodhi said that both cannot be linked even remotely. This is the result of an ongoing measure on the part of GCMMF, and after the circular arrived and actual action could be taken at the society level, the demonetisation happened.

Most dairy farmers are actually women, and state government, which is working on pro-people policies, wants the money to be transferred to their accounts. The secretaries and the other office bearers at the village cooperatives preferred to deal in cash when making payments. With the demonetisation move, these people are now being forced to pay through bank accounts. It is estimated that around 50 per cent of the farmers associated with GCMMF have bank accounts.

GCMMF's 18,000 societies were disbursing about RS 450 crore per week, that is, around Rs 2-3 lakh per society.

Other dairy cooperatives across the country, including the Karnataka Milk Federation (KMF), which procures around 7 million litres from across 14,000 societies and makes payments to the tune of Rs 20 per crore per day to farmers, is also mulling channelising the entire system through bank accounts. A similar movement is already in place at the Maharashtra State Milk Producers Association as well.

The Centre has actually been encouraging direct transfer of payments to the farmers' accounts for over a year now.

Since April 2016, when the Centre introduced e-NAM, 17 States and 1 UT have fully or partially modified their APMC Acts. Recently speaking at a conference Union Minister of Agriculture & Farmers Welfare, Radha Mohan Singh had said that provision of online payment of the sale proceeds to the farmers is made available in the e-NAM portal and states are requested to encourage direct transfer of sales proceeds to the farmer's bank account.

A total number of 585 markets are targeted to be integrated in first phase with e-NAM by March 2018, out of which 400 markets will be integrated by March 2017.

He had announced thate-NAM platform is connected to 250 markets across 10 States as of now (Andhra Pradesh (12), Chhattisgarh (05), Gujarat (40), Haryana (36), Himachal Pradesh (07), Jharkhand (08), Madhya Pradesh (20), Rajasthan (11), Telangana (44), Uttar Pradesh (67). Union Minister informed that so far, Detailed Project Reports (DPRs) for integrating 399 mandis with e-NAM has been received from 14 states and all of them have been approved.