Farmer associations on Saturday demanded that the Government should allow use of the banned 500 and 1,000 rupee notes to buy seeds and fertiliser till December 30, saying that peasants are short of cash and have no takers for their crop. The Government has allowed use of the old notes for certain utility payments till November 24 but has so far not agreed to the same for purchase of agricultural inputs like seeds, fertilisers and pesticides.
Finance Minister Arun Jaitley, in his first pre-Budget consultation, was flooded with representations from the farmer bodies to ease cash crunch by allowing cooperative banks to exchange and accept old notes and dispense more new currency at wholesale mandis. They also sought removal of anomalies in the draft GST Bill, higher budget allocation for agri research and better implementation of existing farm schemes.
Briefing the media after the meeting, the Consortium of Indian Farmers Association (CIFA) General Secretary B D Rami Reddy said, “the timing of demonetisation is not correct. Kharif crops are arriving in the market but there are no buyers because of lack of cash. Rabi sowing has started and farmers need cash for buying various inputs like seeds, fertilisers and water.”
He said: “The Government has given several exemptions to the general public to buy rail and air tickets. We have requested the finance minister to allow farmers to do cash transaction in old notes for buying agricultural inputs till December 30.”
Stating that farmers transact in “100 per cent cash”, he added, “If this exemption is not given, it will have a very bad impact on agriculture production and the overall economy.” Echoing his point, Bharat Krishak Samaj Chairman Ajay Vir Jakhar said, “Demonetisation worries require immediate attention. Restrictions on exchanging and accepting old currency notes imposed on district cooperative banks must be removed immediately.”
This can be done in branches which are electronically connected to the apex bank, the Reserve Bank of India (RBI), he suggested. Also on his wish list is higher cash availability to APMC markets to the tune of 15 per cent of the trader’s weekly average turnover recorded in APMC books last fiscal.
“It will revive stagnating flow of perishable fruits and vegetables,” he reasoned. Suggesting better implementation of the existing agri schemes, the Consortium of Indian Farmers Association has asked the finance minister not to announce any new scheme in the upcoming budget for 2017-18.
“The existing schemes should be implemented in letter and spirit,” Reddy said. He also sought the Government’s intervention to ensure institutional credit is made available to all farmers as only 31 per cent are covered at present.
Meanwhile, wheat sowing in Punjab has been impacted because of the demonetisation of old currency, with growers claiming that they are unable to buy seeds and other inputs due to the “cash crunch”. The Punjab agriculture department has also acknowledged that the wheat sowing trailed by 5 percent because of scrapping of old denomination notes.
The problems for farmers has also been also compounded as they have been unable to get finance from the cooperative banks in the wake of non-acceptance of Rs 500 and Rs 1,000 denomination notes by these banks. “Definitely, there is an impact on wheat sowing due to demonetisation of old notes. The impact so far is to an extent of 5 per cent,” Punjab Agriculture Department Director J S Bains said on Saturday.
Wheat sowing has been completed on 85 per cent of the total targeted area so far, which is 5 per cent less than what it was during corresponding period of last season, he said. The director said that delay in sowing could also lead to reduction in overall productivity of winter crop.
He said wheat sowing should complete by November 15. “Sowing after November 15 can lead to decline of 1.5 quintals per acre per week in wheat yield,” he said. Punjab grows wheat over 35 lakh hectares of area. Describing the decision of the Government to scrap old notes as “ill-timed”, Bhartiya Kisan Union (Ugrahan) General Secretary Sukhdev Singh said that farmers in Punjab are worried a lot as they are facing a “cash crunch”.