Demonetisation: Wheat farmers have no cash for fertilisers, pesticides or labour

Allowing use of Rs 500 notes for purchase of seed does not address other bigger expenses paid out of cash.

Written by Raakhi Jagga , Harish Damodaran | Ludhiana/new Delhi | Published:November 24, 2016 2:00 am
Wheat farmers, cash for fertilisers, farmers seeds, seeds farmers, demonetisation, rabi season, rbi, cash withdrawal norms, cash withdrawal, india news Farmers trying to use old Rs 1,000 notes at a pesticide dealer’s store in Ferozepur.

For farmers growing wheat this rabi season, the Centre’s allowing the use of demonetised Rs 500 notes for purchase of seeds, apart from the permission to draw up to Rs 25,000 cash per week from their bank accounts, may not offer much respite.

One reason here is that wheat is an open-pollinated crop, whose grain saved from the previous year’s crop can serve as seed for the current season. This is unlike for cotton, maize and most vegetables, which are hybrids: their seeds have to be bought each time for the resultant plants to be true-to-type and produce high yields. “Some of us do plant new seeds of good wheat varieties like Pusa HD-3086 and 2967 every year. But most — especially those with smaller holding — buy fresh seeds only once in 3-4 years,” says Wazir Singh Kohar, a 60-acre farmer from Theri village in Fatehabad district of Haryana.

Watch What Else Is Making News

Secondly, in states like Punjab and Haryana, over 80 per cent and 60 per cent sowing, respectively, is completed. Even farmers who haven’t planted would, in most cases, already have procured their seeds, if not stored from last year’s crop. The restrictive conditions imposed by the Centre — purchase of seeds with the old Rs 500 notes can be done only from government outlets or those belonging to the National and State Seeds Corporations, Indian Council of Agricultural Research and state agricultural universities — aren’t also particularly helpful for those who are yet to procure.

Thirdly, seed per se isn’t a very significant element in total cultivation costs. “The seed requirement for wheat is 40 kg per acre, which will cost around Rs 800 if purchased from government stores and Rs 1,000-1,200 from private dealers. Either way, this is way below what we spend on other inputs, especially fertiliser, pesticides and labour,” notes Kohar. “In Punjab, sowing is almost over, barring in the cotton-growing areas where it will take place over the next few days. For most farmers today, cash crunch is an issue mainly in fertiliser and pesticides, as these are required to be given after the first watering of fields is done,” admits Jasbir Singh Bains, director of agriculture, Punjab.

For wheat, farmers normally apply a 50-kg bag of di-ammonium phosphate (DAP) per acre, costing Rs 1,050-1,110, at the time of sowing itself. This is followed by a bag of urea (Rs 285) given 20-25 days after sowing along with a round of irrigation. Subsequent two urea applications happen around 40 days and 50 days after sowing. Besides, about 4 kg of zinc sulphate per acre, costing Rs 50-55/kg, is used. That takes the total expense on fertilisers alone to over Rs 2,100 per acre.

Many farmers, at least in Punjab, would already have purchased DAP, which is applied along with the seed during sowing. “The problem is in urea, where they may not have picked up their full requirement. Urea has to be given immediately after first watering. That time, for farmers who would have sown in the first week of November, is now,” adds Bains. Shingara Singh Maan, who farms six acres at Giddar village in Nathana tehsil of Punjab’s Bathinda district, is among those who had bought DAP before the demonetisation decision on November 8. “I had not stocked up any urea and pesticides in advance because it would have unnecessarily increased my interest outgo. Today, I don’t have cash to buy these, just when most required,” he complains.

The lack of cash with farmers has led to a sharp dip in fertiliser and pesticide sales. “My own daily business is down to Rs 30,000, as against roughly Rs 10 lakh a day that I normally do at this time. Only some big farmers are buying and even they are paying mostly through cheque. Small and marginal farmers aren’t lifting any material, affecting sales across the nearly 15,000 shops in the state”, states Suresh Satija, vice president of the Punjab Pesticide and Fertiliser Dealers Association.

The Punjab government has announced that it will provide farm inputs through primary agricultural cooperative societies. But that may not make much of a difference, as an estimated 60 per cent of the state’s fertiliser requirement is supplied by private dealers. “We have written to the prime minister to permit use of demonetised currency notes for purchase of fertiliser and pesticides. If they have done it in petrol and diesel, why for farm inputs, which are also essential commodities?” asks Satija.

The main pesticides used by farmers in wheat include ‘Vitavax’ (a seed treatment fungicide containing carboxin and thiram active ingredients, costing Rs 180 for 100 grams application per acre), two sprays of sulfosulfuron weedicide (13.5 grams/acre, each Rs 350-400), one of ‘Topik’ clodinafop-propargyl and ‘Algrip’ metsulfuron methyl (both weedicides, costing Rs 150 each) and one of ‘Tilt’ propiconazole (to control yellow rust: Rs 250). Together, the outlay on pesticides works out to Rs 1,400-plus per acre.

The other major expenses are on diesel (Rs 2,000/acre), combine harvesting (Rs 1,000-1,200/acre) and, most important, labour. “If I were to employ labour for all operations — field preparation, sowing and fertiliser application, irrigation and pesticide spraying — they usually take 2 quintals wheat out of the total average yield of 20 quintals per acre. At the latest minimum support price of Rs 1,625/quintal, this is equivalent to Rs 3,250 per acre”, according to Pritam Singh Hanjra, a farmer from Urlana Khurd, a village in Madlauda tehsil of Haryana’s Panipat district.

All put, farmers incur a cultivation cost of Rs 11,000 or so on wheat, of which the seed component is not even a tenth. “How does allowing use of old Rs 500 notes only for purchase of seeds help? And which farmer can really afford to stand in queues now to withdraw Rs 25,000 a week? When will he spent time in his field?”, quipped Hanjra, who only a few days ago completed the harvesting of the basmati paddy crop in 70 out of his 83-acres holding. “At Rs 4,500/acre, my total labour cost for harvesting, threshing and cleaning of the 70-acre crop was Rs 3.15 lakh. I have paid just half of this amount so far and the reason for it is only because of inability to withdraw cash or use the old Rs 500/1,000 notes. I feel bad for the 22 labourers who did the harvesting, but it is certainly not my fault,” he points out.

Farmers are also agitated over not being allowed to use the demonetised notes to repay loans taken from cooperative societies. Amarjeet Singh, a 10-acre farmer from Bhure Kalan village in Ferozepur district, owes Rs 1.10 lakh to the local primary agricultural cooperative society. “They have been told not to accept the old notes. There are many others like me who want to pay, but are unable to do so. If this problem is not resolved, the society will fold up. From where will we, then, get our crop loans in the next season?” is his question.