Demonetisation: APMC traders laud cash limit relaxation for farmers

To ease the acute liquidity crunch in mandis and wholesale markets, which has brought trading virtually to a standstill, the government on Thursday allowed traders registered with agricultural produce market committees (APMCs) to withdraw Rs 50,000 per week from their own bank accounts.

For farmers, it said that they can withdraw Rs 25,000 per week against the crop loans sanctioned and credited in their accounts. 

Trading in India more than 2477 regulated markets or APMCs and over 4,800 sub-market yards has come to a virtual standstill since the last more than a week after Centre withdraw high-value currencies causing an acute liquidity crunch.

Though the step has been overall welcomed by traders as a much needed lifeline for growers, but most say the amount fixed is much lower and would have no impact in trading in mandis in big cities.

However, in mandis in small towns and villages, the relaxation could provide some relief as the volume of transaction is less than big cities.

“The withdrawal amount of Rs 50,000 per week kept for traders registered with APMCs will only help small traders and those who deal in green leafy vegetables like spinach, coriander etc, for others this limit is hardly any relief,” Trilokchand, a prominent potato trader from Azadpur APMC told Business Standard.

He said since the last more than a week, most traders have stopped ordering big quantities as dealers down the line are not willing to pay cash and liquidity has dried up.

“Usually, during this time of the year, around 175-200 trucks of potatoes arrive daily in Azadpur mandi, however, nowadays just around 90 trucks are arriving as transactions have gone down,” he said.  One truck usually carries 10-13 tonnes of potatoes.

Abhay Kumar, secretary of Lohardaga APMC in Jharkhand said that move should cause some relief to traders, but the actual impact would be felt in the coming days.

Apart from extending the cash limit for mandi traders and farmers, the Centre has also decided that the time limit in crop insurance premium cases will be extended by 15 days. The same limit would also apply with regard to their Kisan credit cards.