Farmer:

There are two types of impacts of Demonetization on Indian Agricultural Sector

A. Short Term Impact- As cash is the primary mode of transaction in agriculture sector,
demonetisation is bound to cause temporary stress in the system.Sale, transport, marketing
and distribution of ready produce to wholesale centres or mandis, is dominantly cash-
dependent. Disruptions, breaks in the supply chains feedback to farmers as sales fall,
increased wastage of perishables, lower revenues that show up as trade dues instead of cash
in hand and when credited into bank accounts with limited access affect the sector.

In the transitional phase, farm produces with limited shelf-life like fruits and vegetables,
which significantly contribute to overall farm output, will be hit due to cashlessness.
Similarly, payment of wages to farm laborers and rentals for farm implements will too
become difficult considering the limited access of service providers to the banking system.

So basically the Indian Agriculture Sector has to go through rough time with the
announcement of Demonetization in the country.

B. Long Term Impact-As for the long term Impact of demoneytization I believe this move
has the potential of bringing about transformational changes in the sector like better access
to credit for farmers, elimination of middlemen, which is one of the major causes of poor
condition of Indian farmers as their profit is immensely reduced due to the commission of
the middlemen, direct transfer of subsidies to farmers and ultimately linking the Indian
farmer to the global agricultural market. If the Indian farmers are linked to the global
market it could generate a great amount of revenues for the country.

Farmer

Vamsi Krishna, Msc Agricultural Crop Physiology, Sam Higginbottom Institute of

Agriculture, Technology and Sciences (2018)
Answered Jan 20
 Agriculture is truly dependent upon cash transactions via cash is direct burden to
the farmers markets because they should purchase all their agriculture inputs even
bigger landholders may face problems such as paying daily wages to the farmers
and purchasing agricultural needs for growing crops…on other hand harvested
produce while selling may face the problems…
1. Problems in purchasing seeds at the right time for sowing at upcoming season
2. Many farmers live in the under economy Delayed sowing may efect the crops
Already wheat outcome was decreased in northern India
But government as given a opportunity for the farmers to use old notes for
their commodities purchase

The government allowed farmers to withdraw up to ₹25,000 per week against their crop
loans to ensure sowing of winter crops is done properly.
Farmer

Reports of stress in agriculture have begun to appear because of demonetization. Cash is the
primary mode of transaction in agriculture sector which contributes 15% to India’s total
output. Formal financing in many parts, especially Punjab, Uttar Pradesh, Odisha,
Maharashtra, Gujarat and Kerala is significantly from cooperative banks, which are barred
from exchange-deposit of demonetized currency.

Production in 2016-17 could drop if sowed acreage (rabi) reduces for want of enough seeds
on time to exploit the adequate soil moisture. Yields could fall from late sowing and
subsequent exposure to rough spring weather, the lack of sufficient or timely application of
fertilizers, pesticides, etc.

Urorganised sector

Unorganized sector is severely affected with Demonetization - this is where the free flow of
black money is happening. I don’t mean that this sector is only responsible for the creation
but this sector is responsible for the flow and also to some extent creation of black money.

It is necessary that this sector moves into transactions through Banking channels - this will
also help them in many ways

 They can approach Banks for short-term loans at much lower interest rates in
comparison with unorganized loan sharks.
 They can get more customers through accepting cards and other forms of
electronic payments
 Once they create their payment infrastructure, then they can also do online selling,
auctions and bidding, etc. - specific to their localities and towns.
Informal sctor:

“The innovations that have happened in the last four weeks, since the withdrawal of ₹500 and
₹1,000 notes from circulation, is interesting.

“While the unorganised sector still prefers to go back to cash, they seem to have come to terms with
the fact that the change is inevitable. But the question at this juncture is: ‘What will sustain and what
will not?’ notes Gayathri Vasudevan, Co-founder and Chief Executive of LabourNet, a social
enterprise that creates sustainable benefits for workers in the informal sector. Speaking
to BusinessLine on the impact of demonetisation on the unorganised sector, Vasudevan said: “This
sector broadly comprises three groups: those that are independent (such as carpenters and
electricians); small-time contractors; and contract workers on larger sites.

“Independent/small-time job seekers did not have much to do the last month as people, by and large,
postponed their spends. From 20 jobs a month (on an average), it trickled to just one or two a month
for some of these carpenters and electricians. In the long run though, this would pick up,” Vasudevan
said.

On contract workers on large sites, she said that their principals had, over the weeks, ensured that
their essentials were taken care of. “Their everyday life did not see much of an impact, although their
weekly payments were impacted. Getting change for the “big note” (read ₹2,000) has been and is
still a struggle.”

“Interestingly though, a number of employers took to different types of payment systems and small
shops also started to adopt different mechanisms. For instance, contract workers were given
vouchers for use in kirana shops, or Paytm,” noted Vasudevan.

Stating that this is a “very local” way of handling the situation, she said: “This is visible in Kolkata,
but in some manufacturing hubs in Tamil Nadu, employers are trying to work out a way by paying
for essentials.”
“With 35 per cent of the workforce in non-farm sector, it can be a real challenge to get into cashless
mode,” she said, pointing to the roadside fruit vendors, who continue to deal in cash.

According to Vasudevan, “Going cashless could be a far-fetched dream, at least in a country such as
ours. Small-time job workers would prefer their independence, while for the corporates that engage
migrant workers, it can be more difficult to account for their overtime wages. Migrant workers work
for long hours to earn more. The company would, in such cases, find it difficult to pay through the
formal mechanism.”

Unorganised sector

Ever since the announcement of demonetisation, the income of unorganised sector workers has
come down drastically — by up to 60 per cent.