Government allows farmers to buy seeds with old 500 rupee bills - statement

NEW DELHI (Reuters) - The Indian government has allowed farmers to purchase seeds with old 500 rupee banknote from state-run outlets, the finance ministry said in a statement on Monday.

Prime Minister Narendra Modi's shock move to cancel 500 and 1,000 rupee bills as legal tender has left millions of farmers with little cash to buy seeds and fertilisers for winter crops, threatening production of key commodities and hurting rural communities only just recovering after two years of drought.

(Reporting by Rajesh Kumar Singh; Editing by Sanjeev Miglani)