Whether Prime Minister Narendra Modi’s bold move to counter the black money and parallel economy with demonetisation of Rs 1000 and Rs 500 notes has the desired effect, time will show, but its slowdown effect on Indian agriculture and related industries like agro-chemical industry cannot be denied.
November is a crucial time for farmers in India. They have just harvested the Kharif crop, but are finding it hard to get timely payment for their produce. Keeping in mind the huge dependence of the farm sector on cash, it is feared that farmers, especially small and marginal among them, may be adversely affected, offsetting the benefits of a good monsoon season after two years of drought.
Agricultural growth in India contracted 0.2% in 2014-15 and grew no more than 1.2% in 2015-16, largely because of inadequate monsoon and back to back droughts in some areas.
“Farmers in the middle of the rabi sowing need to buy seeds & fertilisers and other agri inputs. But they are reportedly running out of cash and may not be able to buy these much needed products. In the midst of the cash crunch, even middlemen are finding themselves difficult to help them out. The demonetisation-led slowdown is impacting the agro chemical industry as well. As far as Insecticides (India) Ltd. is concerned, this is normally a time for good collection from the market, but it has been affected for the last 10 days.
Hopefully this is a passing phase and we can look forward to “achche din” soon with the inflow of new currency in the market” says Mr Rajesh Aggarwal, Managing Director, Insecticides (India) Ltd.