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Demonetisation: A Flower Farmer’s Story captures Plight of Farmers who harvest Flowers for the Living

Since demonetisation, the government has been pushing digital payments but most transactions still take place in cash

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Jasmine Flower (representational Image), Wikimedia

Mirjapur/Indore (Madhya Pradesh), Dec 17, 2016: As the sun rose, piles of white chrysanthemums awaited Keshu Singh Patel at his 2.5-acre farm in Mirjapur, a village in western Madhya Pradesh. Every day in the winter, the 55-year-old takes about 70 kg of flowers, tied to his bike, to sell in the flower market 15 km away.

Over the harvesting season from October to January, Patel’s income has fallen by 70 per cent. “Four days before and even after notebandi (demonetisation), I was selling sevanti (chrysanthemums) flowers between Rs 30 and Rs 40 a kg; now they sell between Rs 4 and Rs 6 a kg,” he said.

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Patel is one of India’s 118.6 million farmers — equivalent to the population of the Philippines. Patel is a “small farmer”, as he has about 2.5 acres of land, less than the average land held by an Indian farmer (2.84 acres).

The largest impact of the demonetisation of Rs 500 and Rs 1,000 notes appears to be on the informal economy, which employs 82 per cent of India’s 500-million-strong workforce and generates half of its gross domestic product (GDP).

To grow chrysanthemums on one bigha — about 0.4 acres of land — cost Patel Rs 3,000 in seeds, Rs 15,000 in fertiliser and pesticides, and Rs 7,800 for labour, over three months. About 0.4 acres of land should produce 10-12 quintals of flowers. Patel’s family — his wife, son, daughter and daughter-in-law — work from 9 am to 6 pm on the farm.

If the crop is good, and flowers sell well during the wedding season — November 15 to December 15 — Patel could have made about 2,600 a day. On December 7, when IndiaSpend followed Patel, he earned Rs 543. The plant is sowed before the monsoon and flowers between October and January.

Over the season, the Patel family would have earned Rs 100,000, a profit of more than Rs 74,000. This year, they have earned about Rs 30,000, a profit of Rs 4,000 or 94.5 per cent lower. In the month after notes were banned, he earned only Rs 7,000.

Patel is forced to sell at a lower rate because flowers wither fast, and their rate reduces with time. “I had to throw 35 kg of flowers because there were no buyers yesterday,” he said.

Patel reached the bustling flower market in Indore — considered Madhya Pradesh’s commercial capital — by 7 am. He entered the flower-strewn arena — there are 51 licensed shops in this government market — on his motorcycle laden with flowers tied in makeshift bags of bright yellow, green and red cloth.

Around 12:30 pm, Patel returned to the farm, as three labourers were cutting down the stalks of the chrysanthemums planted on about 0.2 acres of his farm. His family spent the day plucking flowers off the other plants so Patel would have enough to sell the next day.

Of his 2.5 acres, about a fourth of an acre lies fallow, as their isn’t enough water for the crops.

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After selling one crop of flowers, Patel would have waited for the plants to regrow and sold another batch. “But because prices are low, it is more expensive to maintain the plants,” Patel explained. In a regular year, the plants would have been cut in the end of January or February.

When IndiaSpend spoke to Patel’s son, Kantilal, on December 13, he said the market had picked up a little, with chrysanthemums selling between Rs 10 and Rs 20 a kg. “But we’ve already cut down the stalks,” he said, adding that the recovery of prices would not benefit them.

Patel and his family moved above the rural poverty line of Rs 816 per person per month some years ago, and so can’t access the lower-priced wheat, rice, sugar and oil that families below the poverty line receive from the government’s public distribution system.

Fortunately for Patel, he is well known in the village and the flower market. The local village shop is willing to give him oil, sugar and even seeds on credit, and the shop owner in the flower market is willing to give an advance payment for the flowers that he will sell, Patel said.

Since demonetisation, the government has been pushing digital payments but most transactions still take place in cash.

Most farmers and traders had bank accounts, but used cash. They said they either had too little money to put in an account or did not use debit or credit cards regularly. All transactions Patel made during the day were in cash: He filled petrol worth Rs 50 in his motorcycle in the morning, and bought a dozen bananas for Rs 40 in the afternoon.

“Before depositing Rs 500 and Rs 1,000 notes after notebandi, I had used my bank account about two years ago,” Patel said. Kantilal has an ATM card, but used it only once in 5-6 months to withdraw cash, as he had little money in his bank account. The nearest ATM and bank branch is a 15-minute ride from their village.

The family has one basic cell phone they use to call relatives. Though Kantilal has used the Internet in the past, neither father nor son currently has access to the Internet as a smartphone was too expensive to afford.

For four months last year, the family used a Samsung smartphone, which they bought for Rs 8,000. “But someone stole the phone,” Kantilal said. He had used Internet on the phone to access Facebook, he said, adding that they wouldn’t buy a new phone because it was too expensive — equivalent to almost all of their profit this season.

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Patel’s family spends about Rs 1,500 to Rs 2,000 on household items every month.

For Patel, low flower prices mean he has to dip into his savings to pay Rs 130 a day to two labourers who help his family pluck flowers.

“We always face problems of water and electricity shortage,” said Patel. “This year notebandi has spoiled the year for us.” (IANS)

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Usage of Unaccounted Cash Still Prevalent in Market: Report

Large cash transactions still present in resale realty market

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Unaccounted cash
Significant usage of unaccounted cash is still prevalent in the secondarly real estate market. Pixabay

It has been three years since demonetisation which was implemented with the aim to curb and eradicate black money. But according to a report released on Wednesday, significant usage of unaccounted cash is still prevalent in the secondarily real estate market.

The report prepared by Anarock Property Consultants said that up to 30 per cent of the total transaction value in the secondary or resale residential maket in India can still be paid in cash.

However, the primary sales market in tier-I cities offer the least scope for unaccounted wealth in property deals, it said.

“Demonetization in November 2016 sent Indian residential real estate — till then a preferred laundromat for unaccounted wealth — into an almost terminal tailspin. Even three years after DeMo, the battle is only half-won,” said Anuj Puri, Chairman Aof Anarock Property Consultants.

“The secondary or resale residential real estate market still accommodates black money; at least 30 per cent of the total cost of resale property can still be paid in cash. While more and more buyers and sellers prefer official payment routes as a matter of principle, many still use the resale property market to launder untaxed cash,” he added.

Cash in market
Many buyers use the resale property market to launder untaxed cash. Pixabay

As per the report, while the trend in the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR), which are historically notorious for black money in real estate, has tamed considerably in primary sales, their resale property markets still see cash components.

As much as 20-25 per cent of the total resale property cost can still be “adjusted” with black money, it said, adding that in Bengaluru, Pune and Hyderabad, the prevalence of transparent payment routes, even on the resale market, is much higher.

“Unlike the primary sales market, the resale market still lacks strict regulations, making it easier for buyers and sellers to use cash components.

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Also, the primary sales market involves developers with a reputation to protect, while a resale property transaction involves two individuals. The pricing of resale properties also lacks transparency,” the report said.

In the case of direct sales by developers, there are readily-available pricing benchmarks, while in the secondary market, a seller can inflate the price of a property based on location, added features and so on without stating on the books. (IANS)