The impact of the Modi government’s demonetisation drive is beginning to show in the agriculture sector in Bengal. Cash crisis has already affected at least 25 per cent of Rabi crop production in the state with agriculture credit dipping in five major districts of Bengal.
According to banking representatives at the state-level bankers’ committee (SLBC), the districts most impacted are Hooghly, Howrah, North 24-Parganas, Birbhum and Bankura.
“Rabi crop production has already declined by 25%, which is quite an alarming scenario. If the crisis continues this figure will decline further resulting in sharp increase in the price of food products,” state agriculture minister Purnendu Bose told HT.
According to a senior banking representative with SLBC, the credit to deposit ratios in these five districts was already low and the current demonetisation has worsened the situation. The credit deposit ratio is the worst in North 24-Parganas (19%) followed by Hooghly (25%), Howrah (29%), Bankura (24%) and Birbhum (39%).
“There is constant pressure on the bankers to improve the credit to deposit ratio in these five districts. We expected some improvement in the Rabi crop season. But demonetisation has thrown cold water on all our plans,” said a banking representative who did not wish to be named.
Agriculture minister Bose said part of the problem in rural areas has to do with the Centre barring cooperative banks and cooperative societies --- together, they cater to 90% of the rural population --- from the process. “Cooperative banks and societies have become virtually defunct. The situation is really alarming,” Bose told HT.
Bose said crops that will be in short supply would be potatoes, boro rice, seasonal vegetables, pulses and oil seeds.