VIJAYAWADA: When the Prime Minister announced his demonetization decision on November 8, middleaged farmer Varre Venkateswarlu thought he was lucky. He had ventured into aquaculture just a month ago, converting his two-and-ahalf acre paddy field into an aquaculture pond to cultivate shrimp. “Just two days after I paid cash for the shrimp seed, the government announced demonetization. Initially, I felt lucky that I beat the government to it, but now I am worried. I need cash to buy other
inputs,” he says. Venkateswarlu, though assured of credit to buy feed for his shrimp, is concerned about other expenses like fuel for the motor pump, medicines and lab expenses for getting the prawns tested for diseases. It’s a situation of uncertainty in an uncertain industry. Venkateshwarlu’s farm falls in the hinterland of Bhimavaram, the aquaculture capital of Andhra Pradesh. There are 200 acres of aqua farms in his village of Pamulaparru in Undi mandal of West Godavari district.
Another 200 fallow acres are ready for conversion, the farmers hoping like Venkateshwarlu for a bonanza in raising shrimp. But the whole economy of the village is in stasis post-demonetization.
“Labourers have to be paid in cash and I don’t have it. So my son and I are doing all the work. I don’t know what will happen next,” Venkateswarlu says, sounding doubtful about his gamble. Many fingers are crossed in this part of Andhra Pradesh with first-time farmers hoping that the cash crunch will end by the time they have to buy the seed for the February crop. The sentiment is echoed by most of the aqua farmers who sowed in October- November. Those preparing for harvest, like M Srinivas Rao of Pali village in Bhimavaram mandal, are the most anxious, as the need for cash gets more pressing each passing day. Many of them are on the edge of panic for the shrimp have to be harvested in just about 10 days. This in short is how demonetisation has cast a shadow over aquaculture in Andhra Pradesh, the largest producer and exporterof seafood, particularly shrimp, in the country. Around 3.5 lakh farmers and near about 20 lakh workers are dependent on aquaculture in the state. Be it a smalltime prawn farmer in Nellore or a big-fish farmer in Bhimavaram or a seafood exporter in Visakhapatnam, all are feeling the heat of demonetisation be it due to the curbs on withdrawal of money from banks and possible tax burden they have to face.
With not enough liquid cash inm hand, owners are either postponing or making part-payments. “Initially, they gave us `1,000 and `500 notes. We had to take leave to deposit the notes. Now, we are due to be paid again, but the owners say they do not have the cash and ask us to wait for some more time,” says K Ravi Kumar, a supervisor in a fish packing factory in Mahadevapatnam near Bhimavaram.
Chinna Rao, a worker in another packing unit, has run out of cash. “I have to take care of my old parents. Though my parents get pension, withdrawing it has become a laborious task,” he says, adding that even getting credit has become difficult. K Ramakrishna Raju, a fish farmer, on the other hand has a different problem. He has money but it is locked up in transactions and the curbs on bank withdrawals are costing him. “The situation is grim. On an average, 200 truckloads of fish
leave the state per day with each truck load valued at around `10 lakh. Post-demonetisation, the number has come down to 50-60 trucks. If the situation does not improve in the next two weeks, it will be tough,” Gadhiraju Subbaraju, president of the Coastal Aqua Fish Farmers Welfare Association,
Another crucial factor at play in the aquaculture sector in Andhra Pradesh is the very nature of the financial transactions. Most of them are carried out through the non-banking sector. Many farmers have no bank accounts. “Making payments to them has become hard. We are ready to switch to cashless transactions,but without bank accounts, it is not possible,” points out B Mastan Rao, an agent in Nellore.
Aqua farmers are in fact worried about depositing their money in banks as they do not maintain books. If the large amounts get deposited in the form of payment
for their crop in banks, they fear that the taxman will come after them. Since the amount runs into lakhs of rupees, the tax will be heavy. “We have to make payments and if we pay tax for the entire amount, we will be left without anything to clear our dues,” says V S Murthy, a prawn
farmer in Undi.
A higher official dealing with seafood exports said it is time for bankers to take pro-active measures to deal with the situation. Exporters on the other hand say demonetisation has little impact on exports, but are wary of the future. But one thing seems certain. Production will come down by 35-40 per cent, says V Satyanarayna Raju, AP Prawn Farmers’ Association president