OPINION
KEY CONCERN: Do not let the heat reach Modi
- nischay paul
KEY CONCERN: Do not let the heat reach Modi



DEVENDRA Fadnavis is battling a crisis. In his state, milk tankers and vegetable-laden trucks are moving under police escort. Shivraj Chauhan, when he is not in a yoga pose, is being singed by the farmers' protests and the fallout of the killing of farmers in police firing.
 
The Maharashtra Chief Minister is talking of a "never seen before" Rs30,500 crore ($4.7 billion) debt waiver to write off the loans of 3.2 million farmers. Shivraj Chauhan is reminding everyone not yet killed in firing that his state saw an average agriculture growth of 9.7 percent over the last 10 years, and in the last five years, it grew at 14.2 percent. 

In Uttar Pradesh, farmer protests are not dying down despite Yogi Adityanath's move to waive off Rs36,359 crore worth of debt of 94 lakh small, marginal farmers.
In Haryana, Manohar Lal Khattar is gearing up to deal with the upcoming farmers' agitation. 

Given these objective facts, one would assume that the prime priority of the state governments would be to stave off the immediate agitation, take steps to buy some time, bring in certain short term reforms and relief measures, and formulate a route plan towards major farm policy overhaul.

Indications so far point to a rather different focus. All efforts are geared towards ensuring that the farmer unrest does not get connected to demonetisation. 
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The fact is that demonetisation is responsible in a significant way in the current turmoil in farm trade sector. A large section of the populace has still not recovered from the aftereffects. 
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Political pundits say any connection between demonetisation and current unrest in Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh, Punjab, Haryana, Odisha or Telangana will bring the focus on to Narendra Modi and will re-open the debate on the worthless exercise of scrapping large denomination notes that made common people's lives hell for weeks altogether.

The fact is that demonetisation is responsible in a significant way in the current turmoil in farm trade sector. A large section of the populace has still not recovered from the aftereffects. 

Uttar Pradesh is the country's biggest producer of wheat, potatoes, sugarcane and milk. It is the second largest producer of rice and grams. More than 50 percent of population in engaged in agriculture, and the agri trade is largely cash-based.
Demonetisation had sent wholesale vegetable prices crashing to rock-bottom levels, causing misery to millions of farmers who had hoped for good returns for their produce after two successive drought years.

After Modi's surgical strike on cash, onion prices crashed to just Re 1 per kilogram in wholesale markets at Madhya Pradesh’s Neemuch and Mandsaur while tomatoes cost less than Rs 2 per kg in Andhra Pradesh and Chandigarh in December 2016.

A kilogram of cauliflower fetched farmers just Rs 3 in Bihar and potatoes cost Rs 3-5 per kilogram in wholesale markets in Uttar Pradesh.

Steep fall forced farmers to discard their produce in Andhra Pradesh, Chhattisgarh, Madhya Pradesh and Uttar Pradesh as they could not recover even transportation costs.

The cash crunch led to a collapse in the demand for vegetables in wholesale markets. Truckers refused to ply on long routes such as Delhi-Mumbai for weeks altogether as they did not have enough cash to give drivers, most of whom are semi-literate and cannot operate digitally. Also, traders were unable to pay fare in cash to truckers.

The practice of one trader lending cash to another came to a stop as there was not enough money. Farmers could seek compensation for a natural calamity but not for loss because of demonetisation. 
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Try telling farmers in Mandsaur to install the PayTM app. After all, Modi did propose it as a solution to demonetisation.
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While Centre has a minimum support price for grains, there is no such cushion for horticulture products, leading to farmers facing market vagaries. Coupled with bumper crop, and crashing wholesale prices, demonetisation left scars on the agriculture trade.

Now that almost all analysts are citing demonetisation as one of the major reasons for this rupture in horticulture trade, Modi's lieutenants are working overtime that the heat does not reach where it hurts the most. 
 
On June 9, in the aftermath of farmer violence in Madhya Pradesh, the Indian Express editorially commented: "Produce trading in India is predominantly cash-based. The body blow this traditional agro-commercial capital has suffered due to demonetisation — and the inability of formal finance to fill the gap — may explain the apparent lack of liquidity in the markets now. With nobody really to buy and stock up, the speculative capital that used to buoy commodity prices has practically ceased to exist. And it’s farmers who have taken the ultimate hit.”
 
This situation is unsustainable, both politically and economically, it added. Clearly, a direct link between demonetisation and the latest unrest in the farm sector can dent Modi's popularity in ways far more serious than any visit by Rahul Gandhi to Mandsaur. The BJP top brass knows it, and that's the reason that the "never-seen-before waiver" Fadnavis, the yoga-posed "Chauhan" or the saffron robe-clad Yogi refrains from mentioning demonetisation as one of the reasons behind the groundswell of opposition they are facing from the rural folk today.
 
Try telling farmers in Mandsaur to install the PayTM app. After all, Modi did propose it as a solution to demonetisation. 









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