The cash crunch in the rural areas is likely to hit productivity of wheat, the principal rabi (winter) crop, as farmers in Punjab and Haryana have been forced to use seeds saved from last year. According to an official estimate, of 3 million tonne (MT) of seeds annually required for wheat sowing, roughly half are old seeds. The share of seeds from the previous year is expected to substantially go up this year. “This year especially in Punjab and Haryana, a large number of farmers have been unable to buy seeds because of cash crunch. Though the government allowed farmers to buy seeds from state-owned agencies using old R500 notes, this came a bit late,” Bhagwan Dass, director, Young Farmers Association, Punjab told FE.
Pritam Singh, a farmer from Panipat, Haryana echoed similar views. He said the government should have allowed use of old R500 notes for buying seeds from November 8 itself.
As per the data released by agriculture ministry last week, sowing of wheat, a key rabi crop in main growing states of Punjab, Haryana and Uttar Pradesh have slowed down thus bringing down overall sowing to 7.9 million hectare (MH), only marginally higher than last year. According to a scientist with Karnal based Indian Institute of Wheat and Barley Research, the wheat sowing should be completed in Punjab and Haryana over the next one week.
Till last week, sowing of rice was down by 2.3% while that of coarse cereals declined a sharp 11%. The area under pulses, of which a record output was predicted, grew just 4.6%, while oilseeds did comparatively better with an increase in area of 7.4%.
A scientist with Indian Council for Agricultural Research said that about 50% to 60% of sowing in case of oilseeds (like mustard and groundnut) and pulses (gram and lentil) have been completed and the cash crunch is unlikely to impact sowing of two critical rabi crops. “The mustard crop sowing in under control and progressing well,” Umesh Verma, spokesperson of P Mark mustard oil, a leading edible oil company said. The agriculture ministry would release the latest rabi sowing data on Friday.
Farmers can buy fertiliser on credit
The government has directed the states to ensure that farmers do not face difficulties in purchasing fertiliers because of cash crunch. “States have been directed to ensure that all the cooperative societies, private retailers or wholesalers provide fertilizers to farmers through all modes of payments like on credit as well as through credit card, debit card, cheque etc,” fertiliser minister Ananath Kumar on wednesday said.
Kumar said that the government has directed fertilizers companies to see that in case any kind of problem is noticed anywhere in the country due to non-availability of cash or banking services, farmers should be provided fertilizers on credit.
According to official data, there is an availability of 4.1 million tone (MT) of urea this month against the requirement of 3.4 MT. He informed that in the case of Diammonium phosphate (DAP), there is a opening stock of close to 2 MT in the country against overall all demand of 1.2 MT in the month of November. Similarly in case of Potash and NPK fertilizers there are enough stocks available.
The government has not allowed farmers to buy fertiliser using old currency notes of R500 and R1,000 despite demand from the Fertiliser Association of India.
Supporting the government’s move on demonetisation, Kuber Seth, director, Asbah, a key Basmati rice brand, said “it is well known that the labour and transporters are paid in cash, with demonetisation of R1,000 and R500 note there are issues but we are sure that this will be overcome shortly.”