Liquidity crunch owing to Centre’s sudden decision to demonetise high-value currency continues to take toll on the cash-strapped farmers who are forced to face a slowdown in sowing of key rabi crops. The Indian rural economy that was looking forward to recovery on account of favourable Monsoon this year and bumper harvest has been hit hard as sale of kharif crops in mandis have stalled.
Sowing season has a narrow window of 20 days in which farmers have to complete sowing and ploughing. However, with the cash crunch and vendors not accepting old currency notes, sowing has come to a halt and may witness a further delay.
Sale of tractors, agricultural inputs such as seeds, urea and cement have all witnessed a beating in last one week after Rs. 500, and Rs. 1000 currency notes stood abolished. Lakh of farmers in Punjab, Uttar Pradesh, Madhya Pradesh are running out of acceptable cash and are a worried lot for their rabi season sowing.
“Post Diwali is the time when we start selling kharif harvest and accumulate cash to invest in the rabi crop sowing. By November 15, we like to sow wheat crop so we can have enough harvest at the end of the season. However, no one is taking cash and we are not getting any seeds, fertilizers and diesel for sowing so far,” exclaimed Mahesh, a farmer from Punjab.
As per reports, about 60% of wheat crop had been sown till November 10 and after that the process slowed down drastically. Of 35 lakh hectares targeted land under wheat crop in the state, sowing has been done on nearly 22 lakh hectares.
“Sowing wheat by November 15 is the ideal time, a delay after that means loss of 1.5 quintal per acre per week (18-20 quintal per acre is the average production),” Jasbir Singh Bains, agricultural director, Punjab told Hindustan Times.
Work in wholesale markets of Madhya Pradesh has also come to a standstill due to cash crunch.
“This is the peak season when we take our produce to the markets and mandis but we are not receiving anything for our produce. If we do not have cash then how will we purchase new raw material items for sowing required for the rabi season?” questioned a worried farmer, Sitaram, from Sagar, Madhya Pradesh.
Besides farmers, traders and other agri commodities are also facing the wrath of the recent demonetisation.
“Cement dispatches are down 30% since last week. I get a sense that the problem is greater in cities. We remain optimistic that the situation will turn normal in the next four to five days,” H M Bangur, managing director of Shree Cement told Business Standard.
India’s branded fast-moving consumer goods (FMCG) market lies in the rural sector, something which usually depends on cash transactions at least in the last mile. Due to the demonetisation, an impact has been made on this demand.
The pain may seem temporary and a certain section of farmers may be welcoming this move, but plight of farmers is mounting as they fear the delay in sowing season that will, in turn, affect the harvest of rabi season if the situation does not improve in next one week.
Image Credit: darpanmagazine.com
