Chennai: The prevailing currency crunch is likely to affect food production in Tamil Nadu as distribution of crop loans by cooperative banks/institutions and payment for farm inputs have been impacted, the state government said on Wednesday.
In a statement issued after a meeting of officials, chaired by Cooperation Minister Sellur K Raju, to take stock of the situation after the central government demonetised 500/1,000 rupee notes on November 8, the government said farmers were not able to get farm loans or repay their loans on time to get prompt repayment incentives through cooperatives.
The cooperatives were not able to receive fresh deposits from account holders and have become totally inactive.
According to the statement as crop loans were not distributed on timely basis, food production will be impacted, the statement said.
The 23 central cooperative banks and their customers are affected by the Reserve Bank of India’s direction that the former cannot receive any deposits.