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Advisory in this regard was issued by the Gujarat government three days before Prime Minister Narendra Modi announced demonetisation of Rs 500 and Rs 1000 notes.
Cooperative dairies like the Gujarat Cooperative Milk Marketing Federation, which sells milk under the Amul brand, are happy they had pushed for cashless transactions with milk farmers at the right time. The drive has been on for over a year and the Gujarat government recently issued an advisory to district milk unions to route all milk transactions through banks.
"We have been for long discussing with dairies on going cashless. However, there was some resistance so we had requested the Gujarat government to send an advisory in this regard," said R S Sodhi, managing director of the GCMMF, the country's largest dairy cooperative, which works with over 3.6 million farmers affiliated with over 18,000 village cooperative societies that handle around 17 million litres of milk a day.
A source confirmed an advisory in this regard was issued by the Gujarat government on November 5, three days before Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 currency notes. Sources said dairy cooperatives were using this circular to push farmers to open bank accounts and accept payment in their accounts.
Sodhi said the state government circular and the demonetisation were not linked even remotely.
Most dairy farmers in Gujarat are women and the state government wants their payments to be transferred to their bank accounts. Office-bearers in the village cooperatives, however, prefer to deal in cash. With the demonetisation, they are being forced to pay into bank accounts.
Around 50% of the farmers associated with the GCMMF have bank accounts. The federation’s 18,000 societies disburse Rs 450 crore a week.
Other dairy cooperatives, including the Karnataka Milk Federation, which procures 7 million litres of milk daily from 14,000 societies, is also planning to route its Rs 20 crore daily payment to farmers through bank accounts. A similar plan is in place at the Maharashtra State Milk Producers Association.
The Centre has been encouraging direct payments into farmers' bank accounts for over a year now through several schemes like the e-National Agriculture Market (e-NAM). Since April 2016, when the Centre introduced e-NAM, 17 states and one UnionTerritory have modified their APMC Acts to make this possible.
Speaking at a recent conference, Union Agriculture Minister Radha Mohan Singh had said online payment to farmers was possible through the e-NAM portal and he urged states to encourage direct transfers to farmers’ bank accounts.
Around 585 markets are planned to be integrated with e-NAM in the first phase by March 2018, of which 400 will be integrated by March 2017.
Singh said the e-NAM platform was connected to 250 markets in 10 states and detailed project reports for integrating 399 mandis had been received from 14 states. All these had been approved, he added.
