The Indian Government has said that there is no direct link between demonetisation and the prices of agricultural commodities. Commenting on the issue, Agriculture Minister Radha Mohan Singh told the media, "There is no direct link between demonetisation and the prices of agricultural commodities."
“The selling prices are governed by market forces of demand and supply, quality of produce and seasonality,” he added. Singh said the capping imposed on compensation to farmers under the Pradhan Mantri Fasal Bima Yojna (PMFBY) have been removed and farmers can now get compensation even 14 days after the crops are reaped, to help make the scheme attractive.
As per reports, official data earlier this week has shown that wholesale inflation soared to a 39-month high of 6.55 per cent in February from 5.25 per cent in January, while retail inflation rose to 3.65 per cent due to rise in food and fuel prices from 3.17 per cent in the previous month.