Demonetisation badly affected Indian farmers says Agriculture Ministry

Two years after demonetisation, the Union Agriculture Ministry admits that farmers in India were badly affected by the ‘note’ ban. Farmers, mainly the smaller ones, depend on cash to buy seeds and fertilisers.

Meanwhile, BJP-led Narendra Modi government has maintained that demonetisation was necessary to curb black money.

The Ministries of Agriculture, Labour and Employment and Micro, Small and Medium Enterprises on 20 November briefed the Parliamentary Standing Committee on Finance headed by Congress MP Veerappa Moily on the impact of demonetisation.

The report submitted by the Agriculture Ministry said that demonetisation came at a time when farmers were busy in either selling their Kharif crops or planting the Rabi crops. And both the process requires huge amounts of cash, which the note ban removed from the market. The report further said, “Around 263 million farmers in India live in the cash economy but still they didn’t have sufficient cash to purchase seeds and fertilisers for the Rabi or winter crops. Even bigger landlords had faced a problem while paying daily wages to the farmers and purchasing agriculture needs for growing crops.”

The National Seeds Corporation (NSC) also failed to sell around 1.38 lakh quintals of wheat seeds due to cash crisis. The sale failed to lift up even after the government, subsequently, allowed the use of old currency notes of Rs. 500 and Rs. 1,000 for wheat seed sales.

Meanwhile, many opposition members raised sharp questions during the meeting. Sources said, Dinesh Trivedi of All India Trinamool Congress’ asked if the government knew about a report by the Centre for Monitoring Indian Economy (CMIE), which confirmed that 1.5 million jobs were lost during January-April 2017 after demonetisation.