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Cash shortage among farmers due to demonetisation in India has badly affected Rabi crops' seed demand which has almost come to a halt. According to National Seeds Association of India (NSAI), while there is sufficient stock of seeds available in the market, farmers are unable to pay for the same due to the cash shortage, thereby bringing seed demand to halt.
This has affected different crops in different parts of the country. For instance, while parts of Bihar have seen maize sowing being abandoned midway after a steady start, seed demand for wheat sowing in states like Uttarakhand, Punjab, Haryana, and UP is also being affected.
However, the government on Monday allowed farmers to use old notes of Rs 500 denomination to purchase seeds from government agencies only. The seeds industry, however, feels the move is not enough to revive the market as the share of government agencies is less than 20% of total seed outlets.
"Rabi season is going on but farmers are unable to buy seeds with currency notes of Rs 500 and 1,000. This has affected the demand this year badly, mainly from small and marginal farmers in rural areas. Demand is almost stagnant at this time," said Pranjivan Zaveri, managing director of Farm Tech Biogene Private Limited.
NSAI and other regional associations have requested the Centre and state governments to allow farmers to exercise the use of Rs 500 and Rs 1,000 notes for agricultural activities.
"It will hardly help the industry as in overall seeds market, government share is less than 20%. After demonetisation, the seeds manufacturers are in temporary suffocation. Before the beginning of Rabi season we have supplied seeds to our distribution networks and so far we are getting responses from our distributors and dealers. However, the real movement will come if the government allows farmers to buy seeds with Rs 500 notes from any kind of outlets," said K Niranjan Kumar, managing director of GARC Seeds Private Limited from Hyderabad.
This comes at a time when the government is targeting wheat production of 96.50 million tonnes and pulses at 13.50 million tonnes in 2016-17 Rabi season. The availability of wheat seeds is estimated to be 1.36 million tonnes during the Rabi season, much higher than the requirement of 1.17 million tonnes. On the other hand, the supply of jowar seeds is likely to be 12,500 tonnes as against the requirement of 12,100 tonnes, while chickpeas seeds supply would be lower at 160,000 tonnes as against 176,000 tonnes.
According to Kalyan Goswami, executive director of NSAI, "We have written to Prime Minister Narendra Modi to allow farmers to exercise the use of Rs 500 and Rs 1,000 notes for agricultural activities. Due to insufficient quantity of other denominations on hand, they have been unable to buy seeds."
Due to payment issues, labourers or daily wagers are also unavailable for harvesting.
Apparently, November happens to be an important time for Rabi sowing and it is at this time that the liquidity shortage in the market has impacted demand, said M Prabhakar Rao, Chairman and Managing Director of Nuziveedu Seeds. "We have made representation to the central government to give some relaxation to the farmers so that they can buy the seeds. It is difficult to comment on demand as the actual picture will clear in December," said Rao.
