Satyabir Singh, a Jat farmer in Dabali, a village in a wheat and vegetable-growing region near Uttar Pradesh’s Agra city, tends his 1.5 bigha farm by day; at night he is a watchman in a leather factory. The factory job is essential for small farmers like him, for it brings in cash to run the household.
These days, however, Satyabir is only working the farm along with his two sons. The factory has run out of cash since the government invalidated Rs 500 and Rs 1,000 currency notes. The loss of income has several consequences—without Satyabir’s Rs 400 daily wage, the family worries about long-term goals like children’s higher education, and immediate concerns such as how to hire farm labour. There’s still time to sow the next rabi season crop, but it’s running out fast: wheat must be planted within the next week, as the rabi sowing season ends on November 30.
“I can sow in early December too, but after my children stood in line at the bank for two-three days, they managed to get a Rs 2,000 note. If we had got Rs 100 notes, our problems would be solved. Suppose I want to buy something worth Rs 500, I can’t, because nobody has change for Rs 2000,” he complains. So, Satyabir and his family is cutting down on every expense, including food and travel, just so that they can complete the sowing of wheat.
Satyabir supports the Centre’s decision to demonetise, as he believes it has cut the wealthy down to size. His loss of income has not been so intense, so far, as to make him question the rationale, as many economists have, behind suddenly wiping out 85 per cent of currency in circulation. “Rich people lost their entire ill-gotten wealth thanks to Modi’s scheme. They’re throwing their cash into rivers,” he says. Satyabir blames the wealthy and Uttar Pradesh’s flawed policies for his woes. “Sixty per cent of Indians are very rich,” he believes. “I see them daily in industrial areas—factory owners with big cars and huge houses,” he says. “The UP government has weak labour laws, so we work without contracts. Else, we too would have benefits like provident fund, like workers in Delhi.”
Ever since demonetisation, rural UP is abuzz with economic policy debates. The rabi sowing has slowed down, and the poorest here—the landless labourer and petty merchant—is feeling the pinch since cash has virtually disappeared from rural areas. Demonetisation will test the farmer’s mettle and reveal his capacity to bear a financial shock. Farmers are forced to ‘buy’ four hundred-rupee notes for every Rs 500 note from a thriving black market. Small farmers and the poor predominate among those lining up outside banks, desperate to deposit, exchange or withdraw cash. Queues before banks smudge the countryside between Delhi and rural Etawah, a 400-km stretch with Agra as its biggest agricultural, trading and industrial hub.
So severe is the cash crunch that grain mandi managers of western UP met in Bulandshahr this week and decided not to reopen until the currency crisis blows over. So, Dabali’s farmers are waiting, some to sell their ripe produce, others to buy seeds and fertilisers, still others to receive payments or hire labourers for the rabi sowing. Even where Dabali’s half-sown fields look lush, a probing question or two is revelatory: This year, a farmer who has planted his crop is struggling to find cash for fertiliser, and one whose field is ready for sowing is standing in a queue before a bank, hoping to get cash for seeds. “Where all looks well, the farmers have planted last year’s seeds, which give lower yields. What’s happening to rabi sowing since demonetisation might cost the BJP dearly in UP polls,” says Pushpendra Singh, a social activist.
Then, on November 14, the RBI declared state cooperative banks can no longer exchange old currency notes for new, nor accept fresh deposits. “Since then, traders have begun anticipating that the cash crisis will last for months, and they are behaving accordingly by almost halting all operations,” says Sami Aghai, a social activist in Agra. “In rural areas the condition is pitiable, as poor people moved by the slogan against black money are failing to notice their savings and income vanish. Thousands are rendered jobless. When they finally face the impact of this crisis, the results will be devastating.”
In Dabali, the vanishing of cash has first cast its long shadow on the poor, particularly among Mayawati’s supporters. “We are landless working people with nothing left to eat since the big notes went away,” says Reshma, a Dalit woman who could not withdraw her widow’s pension due to the rush in banks. Nor have her three sons, all beldars—farm labourers—who have been paid for the recently harvested wheat. Landlords want them to accept payments in Rs 500 notes but they refuse, having lost several days’ earnings in bank lines. “It’s like a death sentence,” says Reshma. “The bania doesn’t offer us loans and the banks shoo us away.”
“Let landlords exchange the cash themselves. We’re living off loans or exchanging Rs 500 for four hundred-rupee notes. This is destroying our livelihood and savings,” says Reshma’s youngest son, Pushpender. The family has only earned around half of their usual income for November.
“The poor get poorer and the rich richer,” says Mohan, who got a Rs 2,000 note from a local SBI ATM after several trips but doesn’t know where to get it changed into smaller notes to buy food. He borrowed wheat seeds and fertiliser from a local merchant, but Rs 2,000 won’t cover its cost. He needs to return for fresh withdrawals but at the cost of neglecting his vegetable farm. “I haven’t been paid for last year’s produce; now I’m losing this year’s income,” he says.
Sudhir Tiwari grew chilli and eggplant on his two bighas and is now ready to harvest. Next, he needs cash for the wheat crop. He queued up at the Midhakur SBI ATM just past midnight on Friday and withdrew Rs 2,000. He repaid traders who had loaned him wheat seeds and fertiliser but needs more cash for his children’s school fees. “But the bank forbids me from returning for another five days. And at the ATM the police beats us,” he says wearily.
Tiwari, who supports two children, aged 4 and 5, his wife, mother and father, has been hit hard. A 50 kg sack of seeds sells for Rs 1,000 if paid for in smaller denominations. But for buyers with the old Rs 500 or Rs 1,000 notes they cost Rs 1,100 or Rs 1,150. So Tiwari has settled for lesser quantity of seeds for the next wheat crop. The decision, though individual, has implications for the entire country, if more farmers chose, like him, a smaller crop. “After Modi’s announcement I deposited my entire Rs 80,000 savings and that took two full days. Now I can’t withdraw it, so I’m stuck again,” he says.
Dabali’s Irfan sells clothes, cycling from village to village. The Rs 2,000 he withdrew wasn’t enough to purchase a fresh stock, which costs Rs 6,000. For four days, every bank he visited was shut or out of cash. Not just that. His mother has chikunguniya and the doctors charge Rs 1,000 for fresh tests. “My savings are disappearing in Rs 2,000 instalments and I cannot work, for I can’t purchase fresh stock,” he says. “All rural people are hoarding their cash, despite the marriage season. Their confidence in cash is shaken.”
Saleem’s brother Ramesh (it is not unusual here for Muslims to have Hindu names) is trying to get his daughter Shammo married. “Nobody will buy my eggplant crop even at Rs 3 a kilo. I can only make manure out of it now. If this continues, Shammo will not get married,” says Saleem. For him, a marginal farmer, the next crop of winter potatoes will be planted entirely on credit if the bank lines don’t clear up soon. Then, he will worry about repaying the loan and finding someone to finance the fertiliser.
But Mukesh, who runs Dabali’s barber shop, and his customers Ravi and Vishnu, both farm workers, still feel the crisis will ‘fix’ the rich. Demonetisation may have critics, precisely for its ill effects on the poor but, somehow, it also whips up a raw sense of justice. “When Modi announced the end of big notes, I didn’t own a single Rs 500. I’ve never earned more than Rs 250 a day and don’t have, or need, a bank account,” says Mukesh. “Modi’s decision will only harm the rich—those who kept Rs 500 notes hidden in sacks,” he says, as his friends nod in agreement.
In Sagunapur, the village next door, Devendra Dhankad, a small farmer, is similarly affected by expensive seeds and crashing vegetable prices at the start of winter sowing. “But Modi had said money in foreign countries will return to India and there’s hope—ummeed hai—that whatever returns will reach our bank accounts,” he says. Kaptan Singh Bhagela, a capsicum grower, belongs to a section of OBCs that supports the BJP. “Even if BJP’s rivals field a Bhagela candidate, we’ll not leave the party,” he says. Capsicum is selling for Rs 12-13, much below last year’s Rs 22-23 and traders, for the first time ever, haven’t come to buy from the village. “But we’re saving Rs 150 a day working ourselves, instead of hiring labour,” says Kaptan’s mother, who is around 60 and bent over her fields.
Yet, the farther Delhi gets, the worse is the sense of a crisis. Omvir Yadav manages a state cooperative bank branch in Ekdil, a town of 10,000 in Etawah district, 387 km from Delhi. He says farmers—they make up over 90 per cent of the bank’s catchment area—are increasingly anxious about their savings in cooperative accounts. These banks are linked to six cooperative societies through which farmers can purchase grain, seeds or fertiliser. Only as long as the cooperative banks are good for their deposits do the accredited societies survive. If there is a run on these banks the entire rural credit system is at risk.
“We have 14,000 accounts in just this one branch, with deposits worth Rs 12 crore. But we have no money, so they can’t withdraw from their own accounts. It is a very serious problem,” says Yadav.
“I have come here five times for my own money but I’m told there isn’t any,” says Janesh Singh, a farmer. Much of his savings—Rs 1 lakh—are in this one bank branch. “Before November 9 everything was fine but now when I need fertiliser for my potato and wheat there’s no money. The bania is not accepting old notes....” he says. “Now we can buy seeds from government outlets with old Rs 500 notes, but what about fertilizer, food and labour?”
Panchi Lal, a farmer from Hiranpur, opened a cooperative bank account because he felt it was helpful and hassle-free. “I just harvested my rice. Now I need to sow wheat, but I haven’t got money to buy seeds,” says he. “I believe in the fight against black money but I have loans to repay.”
But Meeru, a marginal farmer in village Daulatpur, is convinced the PM has done the right thing. He owns barely an acre, just enough to earn Rs 20,000 twice a year from selling wheat and rice. “Earlier, the mahajan (trader) who bought my crop paid me two-three months late. This year, he paid me on the spot, in cash. Obviously, he always had the money but used to hide it,” says Meeru. “We’re living off our savings. We have few needs anyway. We have chillar (loose change) and grain at home. We were poor and we’ll remain poor. But Modi’s scheme has showed how much money the rich really have,” says his sister, Lali.
A deluge of YouTube videos and WhatsApp messages since the demonetisation has Lali, Meeru and their entire family enthralled: “Two rooms full of cash were seized in Rajasthan. Traders in Bihar were caught with millions in cash. Every corrupt person is having sleepless nights.” With the poor left to bear the brunt of a great economic clean-up, stories of comeuppance are their only solace.
By Pragya Singh in Western UP
