A week after Prime Minister Narendra Modi announced demonetisation of high-value currency notes, farmers in Haryana, West Bengal and Uttar Pradesh were not rattled.
"This is a war against wrongdoers that Modi has waged. Everything will be alright for us," Dubraj Singh, paddy farmer and leader of the local unit of Bharatiya Kisan Union (BKU) in Karnal, Haryana, had said.
Seven months after the announcement, the situation is no longer the same. Singh and other activists of BKU are trying to garner support of farmers to demand a loan waiver by the state government.
The problems farmers faced after the demonetisation move were largely felt in and around the mandis or regulated wholesale agriculture markets.
In Kota, the agricultural heartland of Rajasthan, farmers had grown exotic crops like quinoa, olives and spices. "As demonetisation happened, the buyers and the prices for the crops came crashing," said Mangani Ram, chairman of the Kota Agriculture Produce Marketing Committee (APMC)-run mandi.
"Olive farmers lost heavily as they ran out of money to buy the necessary nutrition for their crops. As a result, the olive plants have become perennially undernourished," said Rajasthan Agriculture Minister Prabhu Lal Saini.
Describing the impact of demonetisation, Saini, who is himself a farmer, said, "For taking Rs 100 in cash, the discount rate was 5-10 per cent in most mandis. This was the premium for cash payments.”
Digitisation, too, has affected the farmers. "The need to have a bank account and an Aadhar card have created another panic in the rural landscape," Jay Shankar, chief economist at Religare Capital Markets, said.
Mihir Shah, former Planning Commission member, explained how demonetisation emptied farmers' coffers. "Demonetisation resulted in a liquidity crunch to the extent that traders did not have money to buy produce from farmers and shunned the markets" said Shah.
Shiv Sena leaders in Maharashtra and West Bengal Chief Minister Mamata Banerjee had criticised demonetisation for making the lives of farmers miserable.
The Reserve Bank of India had said in a report that farmers who grow vegetables, spices, soybean, pulses, potatoes, onions, coriander and fenugreek had to endure "fire sales" of their produce, as prices of these high-value seasonal crops drove to record lows following demonetisation.
