No Adverse Impacts of Demonetisation on Rabi Sowing or Crop Prices

A Niti Aayog member recently said that Demonetisation has had no impacts on Rabi sowing and crop prices like soyabean, paddy and maize. As per the tentative estimates of the area sown which were provided by Ministry of Agriculture, up to November 11th 2016, just post government's decision to impose note ban, the area sown was 14.6 million hectare which was 5.7 lower than the normal crop average.

With each week passing by, the difference between the actual area sown under the crop and the average sown area kept declining. By December 30, 2016, net sown area under Rabi crops exceeded the average or normal area sown under the crop. The difference was evaluated to exceed by 2.77 percent and by that of the area sown last year was 6.86 percent. Generally, Rabi sown area stands at 88 percent by that time but this time around exceeded to 91 percent.

It has also been said that Demonetisation has had no affect on prices of major crops like paddy, soyabean and maize in the month of November and the wholesale prices also shot up by 3 percent in the APMC mandis as compared to the month of October. However, the prices of maize and soyabean has fallen in the month of December but paddy continued scaling higher than the previous two months and also as compared to the last year.

The paper also showed that the Rabi crop output is expected to increase by 6.02 percent compared to the last year as a result of higher sown area. After the losses that might be incurred, the government says that the Rabi output would still stand at an increased measure of 4.96 percent that is higher than 2015-16. It also pointed out that the growth rate of perishables may see a standstill or might see a decline during the months as there has been a drop in the rate of perishables during the months of November and December. The net affect is estimated to be -0.26 percent. The agriculture sector this year is expected to see a high growth of about 6 percent in income and output of the farmer after two back to back years of poor performance due to drought.

By BOA Bureau