Extending a huge relief to the cash-strapped rural India, the government has, on Monday, allowed farmers to buy seeds with old currency notes from any state or central government outlets and agri universities ahead of the Rabi harvesting season.

Farmers can purchase seeds from the centres, units or outlets belonging to the central or state governments, public sector undertakings, national or state seeds corporations, central or state agricultural universities and the Indian Council of Agricultural Research (ICAR), on production of proof of identity, the finance ministry said in a statement. The government is committed to ensure that farmers are suitably facilitated during the Rabi season, it said.

Representational image. AFPRepresentational image. AFP

Representational image. AFP

The Modi government’s current bid to demonetise higher denomination notes to crackdown on black money has severely hit the rural economy. With many villagers yet to be connected to the formal banking system, and the trouble being faced in the last mile, delivery of new currency notes has left rural India scrambling for cash. A large number of agrarians who do have accounts, bank with the local co-operative and Gramin banks, which in compliance with RBI guidelines were not authorised to exchange or deposit the defunct notes.

Add to this the fact that almost all transactions in rural India are cash based and only a fraction of Indians use “plastic money” for day to day paltry payments. The move hit daily-waged farm labourers even more, as cash-starved farmers are unable to pay wages on time in the right currency.

Moreover, with the seeding season for Rabi crop at its peak, the farmers had been in a fix as they didn’t have the new currency notes to purchase fertilisers and new seeds, according to The Hindu

Another report in The Financial Express quotes agriculture ministry’s stats to conclude that the government’s demonetisation move has indeed throttled sowing of Rabi crop as compared to the same time last year.

“Uttar Pradesh has covered 1.5 million hectares so far while the biggest wheat producing state has set a target of 9.9 million hectares. Till now, wheat has been sown in Punjab in 2.4 million hectares while the target for the season is 3.5 million hectares. In Haryana, the grain has been sown in only 8,50,000 hectares so far while the target for 2016-17 session is to cover 2.5 million hectares,” the report states.

Meanwhile, with their hardships in mind, the government has issued a slew of measures to ease the burden on the cash strapped economy. Apart from announcing the relaxation in buying seeds, the government had on Thursday increased the withdrawal limit for farmers to 25,000 apart from allowing them a 15 day grace to pay their crop insurance premiums.

Apart from this, banking coordinators and rural branches of post offices were given greater authority to dispense cash to the people.

The state governments had also pitched in on war footing, trying to ease the pressure on the agro economy, ahead of the sowing season. While the Uttar Pradesh government, has asked the district magistrates to ensure cash availability in their respective regions, Punjab government decided to provide fertilisers and other farm inputs in kind to farmers for sowing of the Rabi crops. The Himachal Pradesh government meanwhile roped in choppers for rushing Rs 2,000, Rs 100, Rs 50 and other small denomination notes to far-flung, remote and tribal areas of the state to ensure adequate supply of valid currency.

With inputs from PTI

First Published On : Nov 21, 2016 15:03 IST

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Demonetisation: Ahead of Rabi season, Modi govt allows farmers to buy seeds with old currency