Rabi planting up 64% in a week, may slump due to demonetisation
NEW DELHI|PUNE: Planting of rabi crops increased by 64% in the past seven days, which according to officials signalled normal agricultural activity despite withdrawal of high-value currency notes. But traders say cash crunch may slow down sowing next week.
The agriculture ministry said planting of wheat trebled to 79.4 lakh hectares as of November 18 from 25.7 lakh hectares a week ago, while pulses rose 51%. Farmers are expected to significantly expand the area under cultivation of pulses after the government effected a generous increase in the minimum support prices for the commodity.
Oilseed acreage rose 33% from last week, and is expected to see a further increase as planting continues. While government officials said the data showed good planting activity, some trade officials said the impact of scarcity of currency notes would actually be felt in the next seven days as farmers would have now used up the cash they had.
But government officials said the higher cash withdrawal limit given to farmers — they can withdraw up to Rs 25,000 a week against sanctioned loans and a similar amount from payments made by APMC markets — will allow them to make sure that they have enough money to buy seeds and fertilisers.
The withdrawal of high-value currency notes has also hit operations in the main agricultural markets, but relaxation in withdrawal limits has boosted sentiment in some places. Traders, however, said the market was still short of cash and that it would take a long time for operations to be normal again.
The Lasalgaon market in Maharashtra opened onion trading on Friday after remaining closed for a week.
“Traders made all payment through cheque or RTGS (bank transfer). Farmers are still in a wait and watch mode. But most of them are still asking for cash as they need it for various farm operations,” said the mandi’s chairman, Jayadatta Holkar.
Subhash Chugh, a tomato trader at Delhi’s Azadpur mandi, said there was a slight pickup in trade as farmers and vegetable vendors were bringing in smaller denomination currency and in some cases even new Rs 500 and Rs 2,000 notes. “The situation will ease by next week.”
Source: ECONOMIC TIMES