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Demonetisation, not drought, behind farmers’ woes


Devinder Sharma writes: After a month of demonetisation, the picture in the rural areas remains too bleak. I know of villages where the farmers had to return empty handed even after seven days of queuing up.  As a TISS study points out, nearly 81 per cent of the villages do not have access to banking.

Devinder Sharma, The New Indian Express

At a time when the Indian economy is faced with a slowdown, it is the farming sector that stands crippled. Suffering from back-to-back drought for two years, demonetisation has struck a severe blow.

I am sure it will be sometimes before a clearer picture emerges. But all efforts to paint a bright picture for agriculture are now beginning to fall apart. While the serpentine queues in the urban areas show no signs of ending even after a month of demonetisation, the picture in the rural areas remains too bleak. With the bank branches not getting adequate cash, I know of villages where the farmers had to return empty handed even after seven days of queuing up.
What makes it worse is the fact, as Prof Ram Kumar of Tata Institute of Social Studies points out, that nearly 81 per cent of the villages do not have access to bank branches.

Despite the Ministry of Agriculture’s claim of a higher sowing of rabi crops as compared with the area sown in previous year, reality checks portray a different picture. The area under wheat sowing was being deliberately compared with the sowings accomplished in 2015, the year of drought. When you compare 17.4 million hectares of wheat sowing achieved by December 4, with the corresponding figures of 21.3 and 20.9 mn hectares in 2013 and 2014 respectively, it reveals the shortfall.

While much had been written about the difficulties encountered by the farmers in undertaking sowing operations, they faced severe blow when the market crashed post demonetisation. Even a month after, the mandis in several cities are partially operating.

With the demand subdued, prices have fallen across the board Only a day ago, farmers in Paththal town in Chhattisgarh dumped tomatoes on the national highway to express their discontent at the decrease in prices. With trucks failing to arrive this year, the rich tomato pocket of Chhattisgarh saw prices lowering to 50 paise per kg. Again, a few days back, farmers distributed potatoes free-of-cost outside the Vidhan Sabha in Lucknow.

Vegetable and fruit growers have been hit the hardest with prices slumping to as low as 45-50 per cent. Cauliflower in Bihar and tomato in Andhra Pradesh were selling at `1 per kg; nearly three lakh tonnes of potato seed in cold storages in Punjab found no buyer; dairy farmers found themselves at the receiving end on failing to buy fodder for cattle. Many such reports have been pouring in from across India. With no government succor, arhtiyas (money lenders) came to farmers’ rescue at many places, especially after the cooperative banks or societies became non-functional.
Considering that 2016-17 witnessed a normal monsoon except in Karnataka and parts of Telengana, Andhra Pradesh and Tamil Nadu, I was expecting some kind of revival in the farm economy.

Knowing that the farmers are not being paid a remunerative price for years, they have to depend on the rain gods to bail them out of dire situation. And this year, the rain gods didn’t disappoint. However, the demonetisation move proved to be a big blow for the farmers, the impact of which would be felt by them for quite long.

hunger55@gmail.com

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That demonetisation will cause Indian economic growth to slow is no longer a matter of speculation. Given that the construction sector has already been muddling along at its lowest pace of growth in two years, the hope of an economic miracle now rests on the agricultural sector. Given that the agricultural sector had been suffering the impact of back-to-back droughts in the past two years, sowing this year was expected to be higher than last year despite significant regional variations in the monsoon this year. Of particular interest is the trend in sowing of wheat which, at 17.4 million hectares, is 15% lower than normal areas sown by 1 December. It is lower than corresponding estimates of sowing at 21.3 million hectares in 2013 and 20.9 million hectares in 2014.

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Most farmers The Wire spoke to in the five districts – UP’s Mahoba, Jhansi and Banda and Madhya Pradesh’s Chhatarpur and Tikamgarh – narrated similar experiences of having been hit by the government’s demonetisation move in one way or another. For instance, in every village, a few farmers risked sowing their wheat crop. But in order to do that, they had to get loans, which further added to their debts.

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