Cash crunch in rural India hits planting of winter crops

While planting of the main winter crop of wheat is 14.7% lower than normal, sowing of rice is 26% lower and the area under coarse grains is down by 19.4%


The government withdrew banknotes of Rs500 and Rs1,000 on 8 November, leading to a cash crunch in rural areas which took a toll on sowing as farmers use cash to pay for seeds, fertilisers and labour. Photo: Bloomberg
The government withdrew banknotes of Rs500 and Rs1,000 on 8 November, leading to a cash crunch in rural areas which took a toll on sowing as farmers use cash to pay for seeds, fertilisers and labour. Photo: Bloomberg

New Delhi: Despite the centre taking several steps to ease the cash crunch in rural India, sowing of winter crops continues to lag behind the normal area sown at this time of the year, shows data released by the agriculture ministry of Friday.

While planting of the main winter crop of wheat is 14.7% lower than normal, sowing of rice is 26% lower and the area under coarse grains is down by 19.4%. However, sowing of pulses and oilseeds is higher by 6.5% and 0.6%, respectively, compared to the normal, the data shows.

Overall, planted area so far is 7.45% lower than normal.

The government withdrew banknotes of Rs500 and Rs1,000 on 8 November, leading to a cash crunch in rural areas which took a toll on sowing as farmers use cash to pay for seeds, fertilisers and labour. Further, farm incomes have been hit as trade in wholesale markets has come to a standstill for want of cash.

Earlier this week, the centre allowed farmers to use old Rs500 notes to buy seeds from government outlets and withdraw Rs25,000 per week from their bank accounts. It also provided cooperative banks in rural areas with Rs21,000 crore to advance as loans to farmers.

Wheat has so far been sown in 12.7 million hectares, 14.7% lower than the normal area of 14.9 million hectares sown at this time of the year. However, planting this year is higher than the 11.7 million hectares covered by this time last year. Wheat planting was severely affected due to a widespread drought in 2015.

According to the agriculture ministry, states such as Uttar Pradesh, Haryana, Gujarat and Rajasthan have reported lower planting. Overall, the wheat crop is sown in over 30 million hectares. Ideally, the crop is to be planted by mid- to end-November and a delay means lower yields.

The data shows that rice has been planted in 6.8 million hectares so far, 26% lower than the normal area of 9.2 million hectares. Southern states such as Tamil Nadu and Andhra Pradesh have reported lower rice planting, according to the agriculture ministry.

However, the area under pulses cultivation is up by 6.5%, with planting at 9.5 million hectares compared to the normal area of 8.9 million hectare. Overall, different rabi crops has been planted in 32.7 million hectares, 7.45% lower than the normal area of 35.4 million hectares.

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