- Recently Union Agriculture Ministry submitted a report to the Parliamentary Standing Committee on Finance, which noted that millions of farmers in India were unable to buy seeds and fertilisers for their winter crops because of demonetisation.
- According to the report, demonetisation came at a time when farmers were engaged in either selling their Kharif crops or sowing the Rabi crops.
- Both these operations needed huge amounts of cash, which demonetisation removed from the market.
- Since India’s 263 million farmers live mostly in the cash economy, millions of farmers were unable to get enough cash to buy seeds and fertilisers for their winter crops due to demonitisation.
- Even bigger landlords faced a problem such as paying daily wages to the farmers and purchasing agriculture needs for growing crops.
- Moreover, the National Seeds Corporation (NSC) failed to sell nearly 1.38 lakh quintals of wheat seeds because of the cash crunch.
- The sale of wheat seeds also did not pick up even after the government allowed the use of old currency notes of Rs 500 and Rs 1,000.
- Significance: Farmers distress is an important issue in three of the five States that are facing Assembly poll: Madhya Pradesh, Rajasthan and Chhattisgarh.
- However, the Labour Ministry filed a laudatory report on demonetisation reporting that comparisons of quarterly employment surveys (QES) for the periods just before and after demonetisation revealed an increase of 1.22 lakh and 1.85 lakh respectively in the fourth and fifth round of the QES, in the total employment for establishments with 10 or more workers.