Kolar in Karnataka - Asia’s No. 2 Tomato Market has no bank or ATM

It is the second-largest market for tomatoes in Asia (after Pimpalgaon, Nashik) and the largest in South India. Yet, the APMC market in Kolar, 70 km from Bengaluru, does not even have a bank branch or an ATM. 

This has put hundreds of farmers, traders, commission agents, porters, transport agents and even truck drivers (who ferry the produce in and out) into severe hardship, especially after the demonetisation of ₹500 and ₹1,000 notes. Across the country, transactions in APMCs such as Kolar were, hitherto, largely in cash. 

“The nearest ATM/bank branch is 1.5-2 km away. My workers are spending more time at long queues in banks to withdraw money. We immediately need a bank here. Also, there’s a need for an awareness drive among farmers on using bank facilities,” a trader said. 

Further, farmers are still insisting on cash payments and not accepting cheques. This has led to an increase in part-payments and deferred payments, with most traders still making payments with the old ₹500 currency. “I will now have to deposit the old currency. As a result, payments to my workers may get delayed by a day or two,” said Muniyappa from Paduvanahalli village, who got a mere ₹4 a kg for his produce of 1,050 kg.

A branch of Kolar DCC Bank that operated in the APMC premises has not been functioning for the past 8-10 months for unknown reasons, officials said. “Considering the hardships faced by market participants, we have started the process of getting a nationalised bank to set up an ATM and a branch here,” said Ravi Kumar, Secretary, APMC, Kolar.

Kolar handles around 1.5 lakh tonnes of tomatoes annually. Arrivals in the past few weeks are up due to conducive weather, while prices are down. “We have demand but are hesitant to book orders. We are booking only if the buyer makes payments through a bank transfer,” said a trader.

For Karnataka Agriculture Minister Krishna Byre Gowda, the lack of banking facilities is an infrastructure issue that can be overcome sooner or later. “I am more worried about the impact of demonetisation. Cash shortage has impacted the traded volumes of agri-commodities across APMCs in the State by 35 per cent and has negatively impacted prices, creating distress,” he said

Tomatoes from the Kolar APMC market are transported to Bihar, Bengal, Odisha, Jharkhand, Punjab, Madhya Pradesh, Uttar Pradesh, Delhi, Andhra Pradesh and Tamil Nadu. They are also exported to Pakistan, Bangladesh and sometimes airlifted to Dubai. 

Besides creating adequate banking facilities, the government should look at having banking correspondents at the village level so that cash can be made available to farmers at their doorsteps, says Professor Gopal Naik of IIM Bangalore.