The Centre’s demonetisation drive did not have any impact on rabi sowing and prices of crops like paddy, soyabean and maize, Niti Aayog member Ramesh Chand has said. “Tentative estimates of area sown are provided by the Ministry of Agriculture each Friday of the week. This data shows that up to November 11, which can be considered as start of demonetisation, rabi sowing was completed on 14.6 million hectare area which was 5.7 per cent lower than the normal crop coverage.
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“The gap between area sown this year and normal area (average area) steadily declined almost every week since the announcement of demonetisation. During the week ending December 30, 2016, net sown area under rabi crops exceeded the normal or average area by 2.77 per cent and area sown last year by 6.86 per cent,” Chand wrote in a research paper titled “Agricultural Growth in the Aftermath of Demonetisation”.
It further said that normally rabi sowing is completed on 88 per cent area by December 30 but this year it has been completed on more than 91 per cent area. The paper said that no effect of demonetisation was seen on prices of major crops like paddy, soyabean and maize in the month of November and their wholesale prices in APMC mandis of the country were around 3 per cent higher in November as compared to the month of October. However, prices of maize and soyabean fell in the month of December but paddy ruled higher than previous two months and also as compared to last year.
“Prices of some of the perishables crashed in the month of December. The main reason for this was found to be the glut in market,” it said. The paper observed that the situation prevailing at the end of December 2016 implies that rabi crop output will increase by 6.02 per cent over last year due to higher area sown.
“Lower use of fertilisers, as observed from the first point sale, can cause 1.06 per cent decline in output of rabi season. These two factors put together imply that rabi output in 2016-17 could be 4.96 per cent higher than 2015-16,” it said.
The paper, however, pointed out that the growth rate in farmers’ income is projected to be slightly lower due to drop in prices of perishables during the months of November and December. “The net effect of fall in prices on farmers’ income is estimated to be -0.26 per cent,” it said. The agriculture sector this year was expected to witness high growth, about 6 per cent, in output and farmers’ income, after two years of poor performance due to back to back droughts.