Impact of ban on 500/- & 1000/- notes on Agriculture Sector

News and Views
1

Dear All,

This topic is just to exchange the views of all members on the impact of ban on 500/- & 1000/- notes on the agriculture sector.

Overall it seems to be a good & bold step by the PM to curb the black money and the funding to terrorism. Just curious to discuss its impact on our sector.

  1. Price of the agriculture lands - will they go down? Probably more farmers can afford to buy them for pure agriculture purpose…?

  2. Registration of the lands - currently there is a vast difference in the govt value & market value… only the govt value is white and generally the differential value is paid in cash which may or may not be treated as all white… what’s going to happen to this practice now? Will this impact and lead to lesser transactions and lead to lowering of land values in the market?

  3. Payment of labour charges - any better ways? Online transfers - is this feasible?

  4. Revenue on the harvest - I don’t think all farmers have bank accounts and are able to read the bank statements… still most of the farmers are more comfortable in receiving the cash in hand…

… any other thoughts and opinions on these lines and on the above points, please?

Requesting all, especially the senior members of this forum, to share your opinions.

Thanks,
Raj.

2
  1. Price of the agriculture lands - will they go down? Probably more farmers can afford to buy them for pure agriculture purpose…?
    I doubt this. People would rather wait and watch, but on going transactions are in trouble. I would say it is a matter of 2-3 years
  2. Registration of the lands -
    Yes. People would rethink on investing on plots
  3. Payment of labour charges - any better ways? Online transfers - is this feasible?
    I would say this also comes to normalcy over a period of time.
    4.Revenue on the harvest -
    Yesterday I sold 265Kg of banana and got paid in 500 and 1000, He told I am accepting it from my customer and I expect you to follow same.He was ready to give receipt in case if I want to declare it as agri income. Gradually old 500 notes will be replaced with new ones
3

Nice points. Regarding the land costs going up or down: it also depends on the guideline value. So the effect of this ban may not be the same everywhere. For example, Doddaballapura has a very steep guideline value. In many instances, guidance value was higher than the actual selling price!!! Whereas, most areas of Tumkur, guideline value is far lesser than the actual selling price. I think more or less the gaps between the guideline value and actual selling price will definitely narrow depending on the location of the land.

4

My almost 7 months search for agricultural land which led me from chennapatna to yediyur and now to denkanikottai (change of state due to legalities), was coming to fruition and now with this new demonetization, cant assess the actual prize of the land I am going to buy, so in a quandry if I should wait for things to settle down. I even do not know if my plans of doing floriculture in one acre land (open farming of roses) will give me enough returns to sustain it successfully. Please advice elders.