There were expectations of a 10-15 percent growth in sales in November year-on-year, says MK Dhanuka, Managing Director, Dhanuka Agritech. But due the demonetisation, the company did not see any growth in sales.
Demonetisation has less impact on the agriculture compared to other industries. Dhanuka says normalcy in the agriculture sector should return post December.
Below is the verbatim transcript of M K Dhanuka’s interview to Latha Venkatesh and Reema Tendulkar on CNBC-TV18.
Latha: Tell us how demand looks like, is it the usual rabi demand or is it less?
A: Food is the basic necessity of human being and for food agriculture has to be there. As per information, the rabi sowing is up by 5 percent and if agriculture is to be there, the uses of seeds, fertilisers and pesticides is going to remain intact. Definitely I don’t say that there is no impact of demonetisation on agri sector because the rural economy is mainly cash driven but I foresee that the impact is much less in comparison to the impact on the other industry.
In India, the farmers are usually buying on credit basis from the dealers and distributors. So, credit sales are taking place; definitely in this month because of the shortage of the new currency it has impacted the growth in the month of November. However, I foresee that from December onwards, things should be normalised and normal sales should pickup from December onwards.
Latha: We got a very different picture from two people one a farmer himself Ajay Vir Jakhar and from Siraj Hussain who was agriculture secretary and is still teaching and researching at ICRIER, they were worried that the cooperatives were entirely out of the picture because of the cash crunch. They don’t have money to lend and if credit doesn’t reach in two weeks to the farmers the consumption of inputs could be seriously impacted both agreed that sowing is as usual, but it is the quality of inputs they were worried about your thoughts?
A: Recently, government has announced loans of Rs 21,000 crore to the farmers through National Bank for Agriculture and Rural Development (NABARD), so apart from this as I share that most of the farmers buy through distributors on credit basis. So, that normal sales are taking place and in November month we are having those regular sales in comparison to last year.
Definitely, the growth has been impacted. So, in my opinion because agricultural has to be there, there should not be much impact of demonetisation on agriculture sector and the sales of the agri inputs whether they are fertilisers or pesticides.