The Ministry of Agriculture, in a report to the Parliamentary Standing Committee on Finance, has said that millions of farmers in the country were unable to buy seeds and fertilisers for winter crops because of the decision to demonetise high-value currency in 2016, reported The Hindu on Wednesday.
The Centre had demonetised notes of Rs 500 and Rs 1,000 on November 8, 2016, claiming it would end the flow of black money, among other things.
The Ministries of Agriculture, Labour and Employment, and Micro, Small and Medium Enterprises on Tuesday briefed the Parliamentary Standing Committee on Finance, headed by Congress MP Veerappa Moily, on the impact of demonetisation. On the same day, Prime Minister Narendra Modi called demonetisation a “bitter medicine” that he had used to return money to the banking system and give “proper treatment to deep-rooted corruption system” in the country.
The report, which was verified by The Hindu, said demonetisation came into effect when farmers were either selling kharif crops (harvested around October and November) or sowing rabi crops (sown around mid-November).
“India’s 263 million farmers live mostly in the cash economy,” the ministry’s report said. “Millions of farmers were unable to get enough cash to buy seeds and fertilisers for their winter crops. Even bigger landlords faced a problem such as paying daily wages to the farmers and purchasing agriculture needs for growing crops.”
As a result of the cash crunch, the National Seeds Corporation failed to sell nearly 1.38 lakh quintals of wheat seeds, the report said. The sale of wheat seeds did not pick up even after the government allowed the use of old currency notes of Rs 500 and Rs 1,000.
Unidentified officials told the newspaper that the standing committee had sent back a team of bureaucrats from the Agriculture Ministry as the Secretary of Agriculture did not attend the meeting with the Parliamentary committee. All India Trinamool Congress leader Dinesh Trivedi had reportedly asked during the meeting if the government was aware of a report by the Centre for Monitoring Indian Economy, which stated that 1.5 million jobs were lost between January 2017 and April 2017 post demonetisation.
Meanwhile, the Ministry of Labour filed a report which said that quarterly employment surveys for the periods just before and after demonetisation showed an increase of 1.22 lakh and 1.85 lakh respectively in the fourth and fifth round of the surveys.