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India's farmers bear the brunt of cash crunch

Friday, November 18, 2016 - 01:41

Millions of small Indian farmers are struggling to buy seeds and fertilizer to sow key summer crops due to a cash crunch caused by the government's radical move to remove 500 and 1,000 rupee notes from circulation. Eve Johnson reports

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This was supposed to be a good year for India's 260 million farmers. After years of drought - they got rain. But then Prime Minister Narendra Modi took 85% of the country's cash out of circulation ...in an effort to stamp out corruption. Now time is running out for farmers to plant their winter crops, but they're stuck with empty fields ....because they have no cash to buy supplies. Experts say that Modi's cash crackdown is hitting rural communities hardest Reuters Mayank Bhardwaj reports from a farming village on the outskirts of New Delhi. SOUNDBITE) (English) MAYANK BHARDWAJ, REUTERS REPORTER, SAYING: "It will have some impact on the rural economy. Farmers will find it difficult to buy input like seeds and fertilizer, productivity will fall, production will fall, rural demand will fall, people will face hardship. It's going to last for a while, perhaps six months." Practically, the government can't do anything about it at the moment. Authorities were supposed to rush new 500 and 2,000 rupee notes into circulation... But that's been delayed. They've also taken some emergency measures to get money from banks to farmers... But experts say it's not much help because there simply aren't many banks in the countryside. Meanwhile, farmers are struggling to get by. (SOUNDBITE) (Hindi) LAND OWNER AND FARMER, RAJ PAL SINGH, SAYING: "We are suffering heavy losses, it has become a huge problem, getting our money deposited, and the seeds or fertilizers are not available." Farmers say they can't afford to wait the season out.. planning to plant later when the cash comes in. Experts warn this means that India's key winter wheat harvest is going to take a hit... Along with farmers' incomes. And more bad news - a drop in wheat output would push up prices already near record highs Meaning higher grocery bills in a country where many still live hand to mouth.

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India's farmers bear the brunt of cash crunch

Friday, November 18, 2016 - 01:41