Lok Sabha Question No. 4 (STARRED), answered on 2018-12-11
Subject: Challenges Faced by Farmers during Demonetization
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: DINESH TRIVEDI

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION & FARMERS WELFARE

## LOK  SABHA STARRED QUESTION NO. 4

TO BE ANSWERED ON THE 11 TH  DECEMBER, 2018

## CHALLENGES FACED BY FARMERS DURING DEMONETIZATION

## *4.    SHRI DINESH TRIVEDI:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether the Government is cognizant of the fact that farmers could not purchase inputs like  pesticides  and  fertilizers,  hire  labour  for  harvest  and  make  cash  transfers  above  Rs. 50,000 to dig a bore well, buy machineries, etc. during the demonetization period;
- (b) if so, the steps taken by the Government to compensate the losses incurred due to the same;
- (c) whether the Government has conducted any study to examine the challenges faced by the farmers without Kisan credit card/agricultural loan credit during demonetization; and
- (d) if so, the details thereof and if not, the reasons therefor?

## ANSWER

MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी (SHRI RADHA MOHAN SINGH)

- (a) to (d): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  LOK  SABHA STARRED QUESTION NO.  4    DUE FOR REPLY ON 11 TH  DECEMBER, 2018.

(a): When  demonetization  was  announced  on  08.11.2016,  the  sowing  season  for  Rabi 2016-17 was on. Government of India in consultation with the State Governments undertook several steps to ensure that the agriculture sector remains unaffected, grows with the desired pace and farmers are able to obtain the necessary inputs like credit, seeds and fertilizers etc. with ease.

## Performance of Agriculture Sector in the year 2016-17

The  steps  taken  by  Government  had  a  positive  impact  on  the  agriculture  sector wherein the coverage and production saw a substantial jump over the previous year.

Rabi area in 2015-16 was 612.28 lakh ha which increased to 635.29 lakh ha in 201617, i.e. the year of demonetization. Similarly, the total foodgrain production in Rabi 2016-17 increased from 1264.50 lakh tons in 2015-16  to  1367.78 lakh tons in 2016-17 and then to 1441.02  lakh tons in 2017-18.

Crops  area  covered  and  production  in  2015-16  viz-a-viz  2016-17  reveals  that substantial  jump  was  made  possible  due  to  a  multi-pronged  strategy  with  continuous monitoring adopted by the Government.

## Seeds

The sale in cash was not affected as Government subsequently allowed for sale of seeds and other inputs through co-operatives, State Governments, public sector undertakings, National or State Seeds Corporations, Central or State Agricultural Universities and the Indian Council of Agricultural Research by accepting purchase through old currency of Rs. 500 and 1000 notes on production of proof of identity.

The total certified/  quality  seed  sold  in  the  country  during  2015-16  was  304.04  lakh quintals, which increased in 2016-17 to 348.58 lakh quintals and in 2017-18 to 352.01 lakh qtls. There is an increase of 44.54 lakh quintals in 2016-17 which is a jump of 14.65%.

## Fertilizer

Department of Fertilizers had issued advisory to all State Governments for  instructing Cooperatives/Private  Retailers/Wholesalers  to  provide  fertilizer  on  credit  and  accept  all modes  of  payment  mainly  credit  cards/debit  cards/cheques  etc.  for  ensuring  fertilizers availability as per demand.  Fertilizer suppliers were asked to extend the credit period by one month in addition to the prevailing credit period to their wholesalers/dealers/retailers.

The total sale of fertilizer during November-December 2016 was 99.63 MT as against 92.99 MT in November-December 2015, which is an increase of 7.14%.

## Machines

The  number  of  machines  purchased  by  farmers  and  number  of  Custom  Hiring Centers established under Sub Mission on Agricultural Mechanization (SMAM) during 201516  were  87,545  &  268  respectively  as  compared  to  15,1801  &  1,450  respectively  during 2016-17.  This  clearly  indicates  that  the  number  of  machines  purchased  and  number  of Custom Hiring Centres was higher in 2016-17.

- (b): Does not arise.
- (c): No study was conducted since the Govt. took the following steps to ensure that the farmers do not face credit crunch in the wake of demonetization:
- i. An  additional  grace  period  of  60  days  for  prompt  repayment  incentive  @  3%  was granted  to  such  farmers  whose  crop  loans  were  due  between  01/11/2016  to  31/12/2016, provided such farmers repaid the same within 60 days from their due date in this period.

ii. Interest waiver for two months (November and December, 2016) was also granted for all short term crop loan availed by farmers from Cooperative Banks between 01.04.2016 to 30.09.2016  and  upfront  deposit  of  the  same  was  done  in  the  accounts  of  the  concerned farmers.  For  this  purpose,  an  additional  resource  of  Rs.660.50  crore  was  provided  by  the Department of Agriculture, Cooperation & Farmers Welfare to NABARD during 2016-17.

iii. To ensure that farmers get adequate cash under the Kisan Credit Card loans, special line of credit was opened for Cooperative banks.  For this purpose, NABARD undertook short term borrowing of up to Rs. 20,000 crore at market rate for onward lending to Cooperative Banks at 4.5% p.a. provided, Cooperative Banks made available short term crop loan up to 3.00 lakh to farmers at 7% p.a. This credit line was in addition to funds of Rs. 45,000 crore already  made  available  to  Cooperative  banks  for  2016-17.  On  this  account,  the  NABARD was  provided  funds  of  Rs.  379.70  crore  by  this  Department  to  meet  liabilities  towards differential  of  interest  rate  of  market  borrowing  and  the  administrative  cost  (@  0.2%)  of NABARD . Additional amount of Rs. 17,880 crore was thus provided through this additional credit line  by NABARD to Cooperative Banks during January to March, 2017.

iv. Following the directions of Ministry of Finance, this Department extended the cut-off date for  submission of premium by farmers for certain States under Pradhan Mantri Fasal Bima Yojana (PMFBY) and Weather Based Crop Insurance Scheme (WBCIS) on case to case basis during 2016-17. Further, for the States whose cut off dates were lying between 15.12.2016 to 31.12.2016, this cut-off date was extended upto 10.01.2017 under PMFBY for payment of premium by farmers.

The  analysis  of  agricultural  credit  flow  for  the  period  from  2014-15  to  2017-18, indicates that   demonetization did not affect the agricultural credit flow at all. On the contrary,

-4- the  agricultural  credit  flow  target  has  consistently  been  surpassed  by  the  Banks  and  the achievement vis-à-vis target was 118% and 116.85% for 2016-17 and 2017-18 respectively. The growth rate of agriculture credit of 2016-17 over 2015-16 stood at 16.45% and that of 2017-18 over 2016-17 at 9.64%.

## Cash Withdrawal Measures Taken by Government

-  The  Farmers  were  permitted  to  draw  upto  Rs.25,000  per  week  in  cash  from  their Know your Customer(KYC) compliant accounts subject to the normal loan limits and conditions.  This facility was also applicable to the Kisan Credit Cards (KCC).
-  The farmers who received payments in their bank accounts through cheque/RTGS for sale  of  their  produce  in  the  APMC  markets  /mandis  were  permitted  to  draw  upto Rs.25,000 per week in cash.
-  Traders  registered  with  APMC  markets/mandis  were  permitted  to  draw  up  to Rs.50,000/- per  week in  cash from  their  KYC  compliant  accounts  as  in  the  case  of business  entities.    This  enabled  these  traders  to  pay  wages  and  facilitate  easy loading, unloading and other activities at the mandis.
-  For  online  purchase  of  inputs  like  seeds,  fertilizer,  the  farmers  could  purchase agricultural inputs from dealers and payment made through National Electronic Fund Transfer (NEFT) Kisan Card, ATM Card of farmers etc. State Governments are also encouraging input dealer to be equipped with point of sale (POS) machine to receive payment from farmers as against purchase of agricultural inputs.
-  The  Department  through  its  many  organizations  viz.  Cooperative  Banks,  including Urban Cooperative Banks  and Multi-State Cooperative Banks,  RRBs,  IFFCO, KRIBCO, NABARD,  National Seed Corporation, Mother Dairy NAFED, Krishi Mandies

etc.  organized training and awareness camps for farmers, dealers and retailers and disseminated  information  through  posters  and  pamphlets  in  regional  language  for promotion  of  cashless  transaction,  opening  of  Mobile  account,  use  of  Rupay  card, Debit Card, use of PoS (Point of Sale Machine), promotion of digital payment between farmers etc.

(d): Question does not arise.

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