The
effects
of
demonetization
on
Artisanal
fish
trade
– a case study from
Cuddalore
district, India
(Photo of fishermen on Samiyar Pettai beach, Credits: Emil Dutour Geerling, 7-5-2017)
University of Amsterdam
The
effects
of
demonetization
on
Artisanal
fish
trade
– a case study from
Cuddalore
district, India
By
Stijn van de Kamp 26-6-2017
Bachelor Thesis Human Geography Faculty of Social and Behavioral Sciences
Dep. Human Geography, Planning & International Development Studies Supervisor: Dr. Maarten Bavinck
Second reader: Mr. Dennis Arnold Student number: 10773193
Abstract:
On 8 November the prime-minister of India, Narendra Modi, announced the demonetization
of all 500 and 1000 rupee notes. The 500 and 1000 rupee notes makes up 85 % of India’s
currency. The demonetization happened overnight without warning. Due to the
demonetization a liquidity shortage occurred. There was no cash money available. Due to
the large size of the informal economy of India which is based on cash many people were
negatively affected. This paper examines the consequences of demonetization on artisanal
fish trade in Tamil Nadu, focusing on the Samiyarpettai village in Cuddalore district. .
Demonetization was found to have had a significant effect on the artisanal fish trade
practices. Due to demonetization there was a sharp decline in the price of fish resulting in
economic degradation of the actors depending on the fish resource. Moreover due to the
lack of cash the fish trade was based on credit during demonetization. The price of fish still
has not recovered 5 months after the initial demonetization. This means that inhabitants are
still trying to cope with extremely low wages, and are having trouble sustaining their livelihood.
Introduction
On 8 November 2016 the Prime-Minister of India, Narendra Modi, announced the
demonetization of all 500 and 1000 rupee notes. The government explained their actions by giving their five incentives for the demonetization. Namely ,fighting terrorism, countering
the use of “black money’’ ,gaining fiscal space, reducing interest rates and formalizing the
informal economy ( Kohli et al, 2016) Although it is widely doubted if demonetization has a
positive influence on these points the long term effects are unknown. The short term
negative effects of demonetization are, in contrast to the long-term effects, already being
documented. Researchers argue that the reduction in liquidity will have an adverse impact
on investments and consumption. This effect can be extraordinary strong in India because
the demonetized 500 and 1000 Rupee consisted of 85 % of the currency of India. This means
that a vast amount of the Indian economy is influenced by this liquidity problem
(Waknis,2017) Especially the informal sector of the Indian economy that is not connected to
a banking grid and is cash-based will face trouble to comprehend the cash shortage in India.
Almost 80 % of the labourers in India are employed in the informal sector This informal
sector is often associated with poor jobs and high poverty rates (Ghani et al,2014). The
demonetization is expected to result in reduced wages, employment rates and consumption
(Waknis, 2017). Because 80 % of the population of India works in the informal sector a
humongous amount of people will be affected by demonetization.
The informal economy is as mentioned vast. Therefore, this study will focus on a particular
sector of the informal economy of India. Namely, artisanal fish trade in Tamil Nadu. Tamil
Nadu is situated on the East coast of India and it has 1,076 km of coastline. Marine fishing is
a major source of employment in Tamil Nadu. Between 1999 and 2004 over 380000 tons of
marine fish have been harvested from the coastal areas A rough distinction between two
types of fisheries can be made. Trawl fisheries and small scale fisheries. Trawl fisheries use
outboard motors and synthetic gear and small scale fisheries use a range of traditional
fishing methods which will be elaborated on later in this paper (Rathakrishnan, et al,2009).The catches of small-scale fisheries are less voluminous than the trawl-fisheries.
Furthermore, small scale fisheries are less-capital intensive and close to the shore (Bavinck,
2005). Small scale fisheries lag behind the rest of society in terms of social and economic
welfare. Small scale fishers often belong to the poorest in society. Moreover literacy and
education levels are notably lower than that of the general population (Hapke et al,2007)
Therefore the expectation is that these small scale fisheries could face significant problems
in sustaining their livelihood.
Because small-scale fishers heavily rely on their ability to catch fish in order to sustain their
livelihood it makes them highly dependent of trade. Money facilitates trade because the
total set of allocations achievable with money is much bigger than the on achievable without
money therefore it increases welfare (Wallace, 2001). The lack of artisanal fish trade might
result in a drastic decrease in welfare for the actors in artisanal fish trade in Tamil Nadu. This
research is interested in uncovering the effects that demonetization has on the artisanal fish
trade of Tamil Nadu. Firstly, the state of artisanal fish trade before demonetization will be
explained. Secondly, this research will look at the impact of demonetization on artisanal fish
trade during the time of demonetization. Thirdly, the long term effects of demonetization on
artisanal fish trade in Tamil Nadu will be discussed.
The research question is as follows: What is the impact of demonetization on artisanal fish
trade in Tamil Nadu, India?
SubQuestions:
How does artisanal fish trade in Tamil Nadu take place, and how is it embedded in the economy of artisanal fisheries?
How did demonetization take place in Tamil Nadu?
1.
Theoretical Framework
1.1 Artisanal fisheries
1.1.1Artisanalfisheriesasapartoftheinformaleconomy
As mentioned in the introduction the informal economy makes up a large size of the Indian
economy. Ghani et al,(2013) state that the informal sector of India employs 85 % of the
population of India. Although the labour share of the informal economy is vast the informal
sector only makes up 21 % of the national GDP. The reason for this small contribution of the
GDP is that the informal sector is less productive than the formal sector (Ghani et al,2013).
Shah (2016) States that demonetization and thus the reduction in liquidity it is bound to
affect consumption and investment decisions. It is predicted that there will be reduced
consumption, wages and employment rates (Waknis,2017) Moreover the informal economy
is often fuelled by micro-financiers and money lenders who due to the cash shortage do not
have sufficient funds to invest. The effects this has on the population can be pronounced in
the case of India because the cash-based economy is of huge proportion and many
transactions are cash-based. Therefore, the impact of the reduced liquidity is significant
(Shah,2016) Furthermore because the informal economy facilitates work for a large group of
people a large portion of the population will be affected. Artisanal fisheries are part of the
informal economy and are cash-based, so the expectation is that the artisanal fisheries will
be affected significantly.
1.1.2.ArtisanalfisheriesinTamilNadu
Artisanal fisheries are fisheries that use traditional fishing methods and are small-scale and
sustainable. Artisanal fishers often are closely linked to the local community. They often fish
in order to sustain their livelihood and not necessarily have an economic incentive (Bavinck
et al,2005). Fishing is caste-based occupation. The fishing caste is in hierarchy one of the
lowest caste in terms of social status (Hapke et al,2007) The number of artisanal boats
quadrupled from the period of 1950 to 2000. This suggests that that the artisanal fishing
sector is growing rapidly. In Tamil Nadu almost 500.000 people are employed in the small
scale fishing sector. (Bavinck & Johnson, 2008) The level of development in Artisanal
fisheries is often low. Furthermore, access to capital is difficult, technology is poor and
infrastructures often are inadequate or non-existing (Raakjær,2011) Moreover literacy and
education levels are notably lower than that of the general population (Hapke et al,2007).
The artisanal fisheries therefore are highly dependent on fish trade. This makes them
vulnerable if trading due to liquidity shortage decreases.
1.2 Fish trade
1.2.1Marketingoffish
The trade of fish sustains the livelihood of a vast number of inhabitants of Tamil Nadu. In
order to realize fish trade a market for the fish should be created. A crucial activity to realize
a market is marketing. Marketing is the act of locating and arranging a market for the fish
that is caught by the fishermen. This locating and arranging a market for the fish is crucial
because otherwise the caught fish would be unsold and would rot. Local fisheries often give
their fish to the woman of the household to market the fish locally. The women play a large
role in the trading of fish because fishermen do not have the time to harvest the fish and sell
the fish therefore the women took up the role of trading fish (Stirrat,1988 ) Fish is also
traded by intermediaries that will sell the fish at a nearby market. There is often tension
between fish dealers (intermediaries) and fisherman. Fishermen often receive a low price for
the fish. In return they do not need to locate a potential buyer (Charles,2008 )
The use of intermediaries can spark conflict between fisherman and fish dealers. The arrangements that are made between fisherman and fish dealers can often be seen as
unfair. In some occasions there is a case of monopsony. Here the fisherman has no power to
bargain because there are no other dealers available. The particular dealer has a monopoly
on the fish price. This might result in the fact that the fisherman will not receive a fair price
for is fish .Trying to reduce the influence of fish traders might have negative effects on the
fishing community because the role of woman in fisheries can be harmed and the stability
and coherence of the community can be negatively affected (Charles,2008 )
1.2.2Processingoffish
The processing of fish plays an important role for the fish trade. Processing of fish can
lengthen the lifespan of the fish and will prepare it for consumption. In artisanal fish trade
the processing methods carried out are labour-intensive. Methods used for the processing of
fish are the heading and gutting of fish in order to prepare it for consumption. In order for
the fish to have a prolonged shelf life the fish is often salted and/ or smoked (Charles,2008)
.Drying the fish is also a method to process the fish. The fish is then dried on the shore to
have a prolonged shelf life (Thapa,2004)
1.2.3Fishmarkets
The market is where the fish is sold and bought. This market can be located in urban centers
or at a community level. Local markets often have the involvement of intermediaries, which
are often mainly women, to sell the fish (Charles, 2008). The most important theory for the
fish market is the theory of supply and demand. The supply and demand theory describes
the supply and demand determines the price of a commodity. Where supply and demand
meet there will be an equilibrium (Cunningham et al, 1985). Ideally the system would be
perfectly competitive. The conditions for a perfectly competitive system are listed below.
● The number of buyers and sellers is large and no one controls enough of the
supply or demand to influence the price. Moreover there is no conflict
between buyer and sellers.
● The price of the commodity is determined by the supply and demand. There
will be an equilibrium at which the supply and demand meet and determine
the price.
● Every actor has full knowledge about information available to all actors in the
fishery.
However, fishing markets are never perfectly competitive systems. The distribution of the
retail price for fish can vary widely and often is unjust. The percentage that fisherman
receive from the final retail price of fish in developing countries is 30 to 40 %. Moreover
there are often contractual restraints that prevent a perfectly competitive system.
Middlemen often interfere with the fish market. In addition to buying fish the middleman
often function as financiers, lending money to fishers, who will agree to sell their fish to
them. Often the fishers become influenced and bonded to certain middleman. The market
now is not just determined by supply and demand but by individual ties between the fishers
and middlemen. These ties can sometimes be experienced as exploitive (Charles,2008)
1.2.4Liquidityinfishtrade
The trade of fish in small scale artisanal communities is based on cash. When there is no
cash available this might result in a reduction of trade. It is generally accepted that money
facilitates more trades and improves welfare than that is possible without it. Monetary
theorists would call this as money being ‘essential’ because the total set of allocations
achievable with money is much bigger than the one achievable without money (Wallace
2001) This suggest that if there is no cash available and there is a liquidity shortage it is
damaging to the artisanal fish trade sector and to the community.
1.2.5Creditdebtandsavings
In many economies including the fishing economy debt and credit are seen as central
problems. It is frequently believed that traders and money lenders gain control over the
producers by giving credit. In this way they manipulate the market and turn the producers,
in this case the fishermen into waged labourers. Or they achieve a monopsonistic position
over the producers and prohibit the trader from trading with other traders resulting in a bad
bargaining position .Traders however are often themselves are a victim of an exploitive
system and is often part of a much larger system of credit and debt relationship.
Stirrat(1988) Also argues that giving credit for traders is often the main reason for
bankruptcy by traders. Traders are often forced into giving advances and loans to fishermen
otherwise they do not receive fish to trade from fishermen. Therefore Stirrat (1988) argues
that the traders (money lenders) do not want to achieve control over production the
fishermen are more concerned with manipulating trade, money and credit.
Credit is very important for the fishing economy. The income of fishermen fluctuates
significantly every day. However certain daily expenses have to be met no matter what. In
addition to the daily expenses additional expenses sometimes have to be done for example,
when a net or a boat gets damaged. Fishermen have trouble with saving money. Therefore
they often need to take credit. Fishermen often do not have a purpose of accumulating
money but to use it. It is often considered pointless to accumulate money in a bank.
Fishermen often perceive being in debt as somehow normal and logical. The people will
rather deplete someone else their resources than their own. If they use the money of
someone else they would retain their own security (Stirrat, 1988).
For household it is normal to take up multiple loans and also give loans to their fellow
villagers. Some households however have very bad credit-ratings and they do not receive
loans from fellow villagers. Loans granted by villagers very rarely carried interest. This is
often disapproved by villagers and viewed as morally unjust. The difference between loans
from inside the village and from outside the village is that loans from inside the village are
given by equals. Loans where outsiders are involved often involved an asymmetry that can
be viewed as exploitation (Stirrat,1988).
1.3 Demonetisation
The demonetization in India differs from usual demonetization which has happened in
multiple countries in history. The strange nature of demonetization is India is that normally a
country discontinues the production of high value notes but still accept these notes a legal
tender. In India the production of 500 and 1000 Rupee notes are discontinued and it is not
accepted as a legal tender. (Waknis, 2017)
India has demonetized their banknotes twice before. Once in January 1946 and once again
on January 1978. In 1946 the 1000,5000 and 10,000 Rupee were taken out of circulation.
The bank notes were taken back into circulation in 1954. These notes however made up only
5 % of the currency. This is in contrast with the current demonetization of the 500 and 1000
Rupee which makes up 85 % of the currency of India. Therefore, the impact of the current
demonetization is vaster. In January 1978 the 1000, 5000 and 10.000 Rupee notes were
discontinued. The impact of this demonetization was marginal as it only made up 15 % of the
total currency. Both times the government discontinued the bank notes in order to tackle
‘’Black money’’. The demonetization of 1946 and 1978 both failed as only 15 %of high
currency notes were exchanged and over 85 % of the high currency notes never surfaced
(Jhakday,2016).
The expectation is that the current demonetization has more impact than its predecessors
because a higher percentage of the currency is taken out of circulation. The 5 main reason
for the government to make such a bald move are, fighting terrorism, “black money’’,
gaining fiscal space, reducing interest rates and formalizing the informal economy ( Kohli et
al, 2016) This research mainly has overlap with the effect of demonetization against tackling
‘’black money’’ and formalizing the informal economy. This because small-scale fisheries are
part of the informal economy and the money is not taxed (Ghani,2013)
The effects of demonetization on tackling the problems mentioned above are widely
contested in the existing literature. Relevant to this study are 2 problems the government
wishes to encounter. Namely, eradicating ‘’black money’’ and formalizing of the informal
economy. Kohli (et al,2016) has severe critique on the measure of demonetization because
he states that it is narrow viewed. In order for the demonetization to have effect on black
money, the black money has to be stored in cash. The view that black money often is stored
in cash is narrow as it is often stored in real estate or raw material such as gold and silver.
Furthermore, people who generate black money often also generate a white income. They
therefore may choose to declare their saving as a portion of their legitimate income.
Furthermore, there are numerous ways in which resourceful individuals can alter black
money into white money. Therefore (Kohli et al,2016) believe that demonetization does not
have a sufficient impact in tackling black money. Moreover Kohli (et al,2016) states that
formalizing the informal economy by de-monetizing the 500 and 1000 Rupee in order to
diminish the shadow economy of India might be insufficient. As a cash-economy does not
have to mean that there is a large shadow economy and vice-versa (Dominik,2000).
Therefore, this measure might not have an effect.
1.4 Social capital
The social capital theory is of great importance for this research. Social capital and social
networks are viewed as key components for desirable social and economic outcomes for
fisheries ( Grafton,2005) Social capital is an all-encompassing term for the norms and the
social networks that facilitate co-operation between groups of individuals (Portes,1998)
Social capital can only exist on a community level. Moreover it is a local an impure public
good because individuals can enjoy the benefits of social capital without diminishing the
benefits of another person and every member in the community can enjoy the benefits of
social capital if they stay a member of the community (Grafton,2005)
Social capital is often categorized in three distinct related areas. Namely, trust, trustworthiness, civic engagement and cooperation and social networks. Trust and
trustworthiness helps to determine the effectiveness and quality of social relations (Grafton,
2005). A lack of trust hereby information exchanges that can improve welfare will not occur.
If there is trust there is general reciprocity. This means that communities share knowledge
and information among individuals because they are sure of the fact that the other party will
do the same if necessary. If fishers have mutual trust the sharing of knowledge about the
resource will increase and this will result in catching of fish at lower cost and better
knowledge about the resource stock.
In addition to trust and trustworthiness civic engagement and co-operation are important
measurements for social capital in the fishing sector. Co-operation and community management is the fundament for on-going sustainability of marine resources
(Paldam,2000) Co-management is an important tool to have well-functioning fisheries .
There must be conversation between the local actors in the fish trade and between regulators (local or governmental). Co-operation between actors will benefit the fishing
community (Grafton,2005).
Social relations are the causal determination of social capital. Social relation can be divided
into three categories. Namely, binding, bridging and bonding social capital. Bonding social
capital describes strong relationships between groups of like-minded individual such as
small-scale fisheries. Strong bonding ties are strongly related to well-established trust and
cooperation. Bridging social capital describes the linkage of different social groups that are
similar. This can mean that certain fishing communities share technology or knowledge.
Linking social capital refers to connection with other groups at different hierarchical levels
(Gafton,2005).
Because the fish stock is a common pool resource there is no excludability of fisherman. In
addition the fish stock is a natural capital stock this means that it can be depleted by
harvesting. This means that the harvesting of fish is rivalrous. The more a fish stock is
depleted the more valuable the fish species are and the higher the rivalry. Because the
rivalry and the non-excludability of the resource collective action is necessary and beneficial
for the sustainability and harvest of the fishing resource (Grafton, 2005)
Social capital furthermore contributes to the resilience of communities. Because when there
is a stressful event such as flooding or demonetization a community has to adapt. Because
adaptivity is a dynamic social process it means that the ability of a community or society to
adapt to certain stressful events is largely defined by the collective action and social capital
of a community or society (Adger,2003)
2.
Methodology
To study the effects of demonetization on artisanal fish trade in Tamil Nadu field I travelled
to India . I travelled to Tamil Nadu to a small fishing village named Samiyar Pettai in Tamil
Nadu . Here I did extensive field work for the duration of 4 weeks. The field work was
necessary to gain knowledge about deep context specific and spatial information about the
research subject. The aim of the field-work was to identify and interview small-scale fisheries
and traders in the village in which I conduct my fieldwork and to research how they and their
trading practices were affected by demonetization. In order to identify the small-scale
fisheries and traders I followed the supply chain of fish from catch to retail. I used a different
series of methods to research the effects of demonetization on artisanal fish trade. By using
multiple techniques I strived to get a complete view of the effects of demonetization of
demonetisation on artisanal fish trade.
2.1 Research Methods
This research intensively studied a delimited context-specific phenomenon; therefore it is a
case-study. The case-study is explanatory because this research will tends to explain the
effects of demonetization on artisanal fish trade in Tamil Nadu. This study will have a
mixed-method approach. This means that both qualitative and quantitative data will be used
in order to answer the research question (Bryman,2015). Although this thesis will mainly
consist of qualitative data from interviews with important actors of the artisanal fish trade in
Tamil Nadu .The qualitative data will be collected by conducting semi-structured interviews,
informal conversations and by participating observations. The quantitative data will be
collected by a survey. In addition to the data that will be collected during the field work an
extensive amount of literature research is conducted.
2.2 Research population
The research population consists of multiple groups. The main actors in the artisanal fish
trade sector are incorporated in the research population. An important actor in the fish
trade sector are the fishermen. The fishermen consist of three different groups. Namely,
fibre boat owners, Kattumaram owners and labourers. The fibre boat owners are the owners of mechanized fibre boats. This means that the boats have outboard motors. The fibre boat
owners hire labourers to work with them on the boat. These labourers work on the boats as
partners and therefore get a percentage of the profit of the daily the fish catch. They do not
have fixed wages. The percentage which the labourers have to share ranges from 40 to 75 %
of the daily catch after expenses.
The last group of fisherman consists of Kattumaram owners. These are boat owners that
own a small non-motorized boat that can be operated by a single person. In Samiyar Pettai I
counted 92 fibre boats and 27 catamaran boats. Thus, the group of fibre boat owners is
significantly higher than the group of catamaran owners.
The second group consists of auctioneers. In Samiyar Pettai there were three auction
women. These auction women auction the fish of fisherman to traders. They take a small
proportion as commission for facilitating and carrying out the auction. They will sell this fish
in nearby villages or at the roads. The auctioneers also function as money lenders to
fisherman when they need to invest in gear or repair their boats. Moreover the auction
women often give advances to the fisherman so that the fishermen trade their fish through
the auctioneers. The auction woman are therefore of significant importance for the village
community and an important actor in the artisanal fish trade sector.
The third group consists of fish vendors. The fish vendors in the village of Samiyar Pettai are
small-scale. This group is very important in the artisanal fish trade sector of Samiyar Pettai.
They buy and sell the fish caught by the fisherman. The group of fish vendors mainly consists
of women but in the period this research was conducted there were also 3 male fish
vendors. The fish vendors are of significant importance for the artisanal fish trade because
they ensure that the fish reaches a significant amount of consumers. They are therefore very
important in determining the price of fish.
2.3 Literature research
In addition to the field work a literature research is conducted, in order to deliver a complete
research, to place this research into an existing body of literature and to give this thesis
theoretical relevance. The literature research will contain information about multiple
subjects. It will consist of information about artisanal fish trade, demonetization, social
capital and economic theories about fish trade. For these subjects a significant amount of
literature is available, about the current form of demonetization in India however little is
known and it falls short of literature. This is probable because the demonetization of the 500
and 1000 Rupee happened short before this research was conducted. The long term effects
of demonetization therefore are unknown. The lack of knowledge in literature about this
form of demonetization will add to the relevance of this study.
2.4 Interviews
An important tool for collecting qualitative data are semi-structured interviews. Semi-structured interviews are conversation where the respondents from their own
perspective gives comprehensive and full answers to the questions (Bryman,2015). For this
research I used semi-structured interviews to gain deep context specific knowledge about
certain subjects. It was critical that the respondent answered from their own perspective.
Interviews helped me to collect most of the qualitative data. Because most of the
respondents were not able to speak English a translator was used to help conduct the interviews. The translator was of significant importance for this research. Without the translator communication with the respondents was not possible. The interviews were
conducted mostly in the morning because the fisherman would return from sea and the fish
was auctioned in the morning. It was not hard to find respondents for the interviews
because the important actors where all situated and concentrated at the beach in the
morning. Therefore it was easy to locate them. This research tended to get a significant
amount of interviews from each group of the research population. Many interviews
moreover repeated multiple questions to the different groups for two reasons.
1: To triangulate important information within the different groups.
2: To uncover certain differences between the multiple groups
A snowball sampling method was used to sample the respondents for the interviews.
Snowball-sampling is a nonprobability sampling method technique where the existing
respondents recruit future subjects from their acquaintances ( Bryman, 2015) . Whenever a
respondent was interviewed I would ask if he knew for example, a fibre boat owner. He
would then help us locate the next respondent for the research. This sampling method
proved to be useful for the research because I was able to efficiently target respondents that
would contribute to the research.
2.5 Informal conversations
In addition to semi-structured interviews, informal conversations contributed to this research. Informal conversations help to gain knowledge about the everyday life of the
fishing community of Samiyar Pettai ,to understand certain choices the respondents made
and helped to gain context specific information . Furthermore, informal conversations
helped me to identify and locate important actors. When having a normal conversation with
a person I would always ask I they knew somebody interesting to interview. This is also an
example of snowball-sampling. I and my translator also did multiple beach walks where we
would walk along the shoreline and would talk to people on the beach and asked questions
about when and where we could meet certain persons and we talked about everyday life to
gain a deeper understanding about the community.
2.6 Participating Participant observations
The method of a participating observation was extensively used during this research. During
this research I participated and observed in the fish trading practices of the fishing
community of Samiyar Pettai. At the auction every morning I would look who bought from
whom and how the auction woman would sell the fish and would then give the money to
the fisherman. Furthermore, I observed where the fish vendors sold their fish and how the
fisherman repaired their nets. By continually observing what is happening one can acquire
very useful context-specific information that is close to the social reality (Bryman,2015) . I
would for example observe if there was any distrust or competition among the fisherman
and the fish sellers. Furthermore observation helped me to identify important actors and to
find respondents for the research.
2.7 Survey
In addition to the qualitative data a survey was conducted. The survey was conducted to
have deeper insight in the demographic composition of the village of Samiyar Pettai.
Moreover I included some questions which are beneficial to my research. With a group of
four students we surveyed around 120 households in Samiyar Pettai. In total 519 persons
were surveyed. The total population of Samiyar Pettai lies around 2100 persons (ICMF, 2010)
We chose to do the survey with a bigger group so that we would be able to include a large
share of the population of Samiyar Pettai. This would add to the representability of the
survey. Because the larger the share of the population of the village was surveyed the higher
the probability is that the survey can be generalized among the entire population of Samiyar
Pettai. The survey consisted of multiple questions. Some of which were not useful for my
subject. These questions where included in the research for the other research subject of my
fellow researchers.
We split up the village in four segments. Each student had their own segment in which they
needed to survey every house. We surveyed the village for over a period of three days. The
inhabitants in the village were cooperative and no respondents declined to fill in the survey.
I included three questions in the survey that where helpful for my research.
1: Are the effects of demonetization on you livelihood negative or positive?
2: Did you need to get a loan during demonetization, if yes, how much?
3: Did your income decline or increase during demonetization, if yes, how much?
This information is useful because it shows the effects of demonetization on the income of
the population of Samiyar Pettai . Furthermore it shows if demonetization is perceived as
negative or positive by the population of Samiyar Pettai. Moreover it shows if inhabitants
needed to take up a loan because they needed to pay debt or they had no liquid funds. The
other question in the survey focused on the demographic characteristics of the inhabitants
such as, age, role in family and education. Furthermore we asked the inhabitants about their
employment.
2.8 Data analysis:
The data was analyzed as follows. The interviews where written down with keywords. After
a day of conducting interviews I would write the interviews down in a detailed report. I
would also write my observations down and would include them in the report. This report
would be updated daily. After the report was finished I categorized the data from each
specific group together. This gave me a good overview of the data for each group. The data
was checked for irregularities and similarities. The data which I included in this thesis was
carefully checked for triangulation. Multiple respondents needed to have stated the same
before I would treat it as potential reliable information. The information of this paper
therefore consists mainly of corresponding answers from respondents. Using this form of
analyzing I tended to produce a research paper that is as close to the truth as possible. The
data from the survey was analyzed with SPSS. SPSS is a statistic program that is commonly
used by researchers because it is reliant and it has a large set of possibilities.
2.9 Expected limitations
Although this research tried to be as complete as possible, a few limitations should be taken
into account. Firstly there was the limitation of time. The research period should have lasted
4 weeks. Because we had trouble to find suitable housing in the research area the period in
which I could conduct my research was limited to three weeks. It was for me still possible to
have enough respondents to conduct a complete research. This was because all the
respondents were situated close to each other and thus where easy to interact with without
losing time with searching for the respondents. However an extra week would be beneficial
for the research.
Another limitation was hostility against the researchers from certain inhabitants of the
village. After we lived in Samiyar Pettai for three nights we had to move to a nearby village.
Inhabitants of Samiyar Pettai found it to strange to have a group of foreigners living in their
village. We could continue with our research but we could not live there anymore. We
moved to a village approximately 6 kilometers from our research village. The hostility from
some inhabitants of the village might have made some inhabitants reluctant to answer
certain question. There is a possibility that some respondents held back certain information
out of fear for certain community members.
In addition to the hostility of certain inhabitants the language barrier between me and the
respondents was also limiting the research. Because all the conversations had to be
translated it was possible that some information was lost in translation. Certain information
therefore is not transferred from the respondent to me. Moreover, my translator sometimes
had trouble with comprehending certain question that I wanted him to ask. Thus, in some
occasions I could not ask my desired questions. Furthermore, it took a significant amount of
time to finish interviews because he would not understand what I asked from him. The
respondent sometimes became annoyed which was not beneficial for the research.
Another limitation for this research is that some respondent might have been reluctant to
answer certain personal questions and therefore answered them falsely. In this research I
asked a lot of people personal questions about their income. I noticed during my research
that some respondents came up with extremely high amounts which could not be true.
Some respondents therefore showed reluctance to answer a question truthfully. This can be
limiting to a research to a great extent because somehow the researchers needs to
determine which information might be true or false. Triangulation as described in the data
analysis is a useful tool.
2.10 Ethical considerations
Ethical considerations are important for a research. A research should not harm the
respondents who are willing to contribute to the research and share information with the
researcher. It is important to avoid harm to the respondents and no research should be done
without their informed consent (Bryman,2015). In this research it was made sure that the
respondent knew what the research was about and that they gave permission. For this
research no harm has been done to respondents and none gave information against their
will. There are no names used in this research accept if the respondents specifically asked if
their names could be used.
3.
Location
Figuur 2: Aerial photo of Samiyar Pettai (Source, Google Earth, 24-6-1017)
The field work of this research is conducted in Samiyar Pettai. Samiyar Pettai is a fishing
village located in Cuddalore district which lies in Tamil Nadu. Cuddalore district lies at the
south-east coast of India. Villages and cities that are situated closely to Samiyar Pettai are
Parangipettai, Chidambaram and Cuddalore. Samiyar Pettai is situated right at the beach
making it easy for the fisherman to go fishing. Furthermore the village has an infrastructure
that is suitable for the trading of fish and other activities that are necessary for a fishing
economy. There is a road that goes to the beach which makes transporting the fish of the
beach more easy. Furthermore there is a sizeable amount of pavement near the beach
where the fish can be traded. Moreover there are large buildings where the nets for the
fishing boats can be stored and repaired. Moreover this building can be used for trading
when it is raining. Samiyar Pettai has a relatively small population of 2100 inhabitants. The
village is characterized by its large percentage of people that are employed in the fishing
economy. There are multiple reasons why this location was chosen to conduct the field
work. Firstly, the high percentage of people employed in the fishing village makes the fishing
village an excellent location to research fisheries. Secondly, the fishing village is
characterized by artisanal fish trade. There are no trawlers. This makes this village a suitable
location to research artisanal fish trade. Thirdly, in Tamil Nadu there are multiple villages
that are similar to Samiyar Pettai. This means that these are also villages that depend on the
trade and catchment of fish by artisanal fishing methods. This means that this research can
be partly generalized to a larger number of villages, therefore adding to the relevance of this
research.
4.
Demonetization and fish trade: results of study
4.1 Artisanal fish trade in Tamil Nadu
In order to gain knowledge about artisanal fish trade in Tamil Nadu fieldwork was conducted
in Samiyar Pettai. Samiyar Pettai is a relatively small village. A very important aspect that
affects artisanal fish trade in Samiyar Pettai is the fact that Samiyar Pettai does not have a
harbour where trawlers can dock. Motorized fibre boats and Catamaran boats will land
directly on the beach. Because of the lack of a docking place for a large amount of trawlers
and other boats, there are not many traders or boats coming to Samiyar Pettai. The
respondents that were interviewed stated that the boats that sell their fish in Samiyar Pettai
belong to residents of Samiyar Pettai. In order to determine how vast the artisanal fish trade
sector was in Samiyar Pettai I counted the boats in Samiyar Pettai. In Samiyar Pettai there
were 92 motorized boats and 25 catamaran boats. This number can however differ slightly because some boats might have gone fishing during the time of the boat count. The
motorized boats are approximately 3 times the size of the small catamaran boats. The
respondents stated that the boats go up to 30 kilometers into the sea in order to catch their
fish. Because of the size the owners of the boats need to hire labourers to work on their
boats. Moreover, these boats use outboard motors so they need to buy gasoline.
Furthermore, a motorized boat is expensive so it is a vast investment for the boat-owners
and they often need to take a loan in order to be able to own a motorized boat. One
fisherman stated that he took a lot of credit to buy a fibre boat and is still in debt 5 years
after the boat was purchased. In contradiction to the motorized boats the Catamaran boats
are operated by 1 person only. The catamaran boats furthermore do not go further than 1
km from the shore. Moreover, the boat is not motorized. So the motorized boats have more
costs because gasoline and wages have to be paid. The wages of the waged labourer are
determined by the amount of fish they catch. The boat owners and labourers that were
interviewed stated that most owners would, after expenses, give 60 % of the earned money
to the labourers and 40 % to the owners. But, sometimes especially when the boat has many
labourers it would be 75 % for the labourers and 25 % for the owner.
Many of the fishermen live in a joint family system. This means that the entire family lives
under one roof. In a few occasions up to 9 people from three generations lived under one
roof. In the interviews it became clear that in most cases the women are housewives. They
look after the children and will prepare food for the family. So often a large family depends
on the income of the fisherman. Some women do work as fish women vendors or will work
in the government 100 days employment scheme. This is initiative to eradicate poverty by
the government. The government pays 100 rupees a day for people that help clean-up the environment.
The interviewed fishermen stated that they mostly go out to fish around 2 A.M. They will fish
until early in the morning and they auction their fish from around 5 A.M. till 8 A.M. By
observing the fisherman it became clear that they distributed their fish among three auction
woman. When interviewed the auction woman stated that they each have a few boats that
deliver fish to them. One fisherman named Mano Ranjitham always brings his fish to
Thailamai. She is one of the three fish auctioneers of Samiyar Pettai. Mano states ‘’ It is easy
for me to bring the fish to a fish auctioneer. She will sell the fish for me so I don’t have to do it myself. The price of fish is also higher because of the auction woman’’ . This research argues
that there are multiple incentives for fisherman to sell their fish through an auctioneer. It
keeps the price higher because the people that sell the fish need to bid. lf the fisherman
would sell the fish directly to the fish buyers, they would be likely to undercut each other’s
prices. The interviewed fisherman acknowledged the importance of the auctioneers and
stated that they have a significant contribution to the trade of artisanal fish in Samiyar
Pettai.
After the auction woman sold the fish of a fisherman to the highest bidder/bidders she will
give the money to the fisherman. The auctioneer as a commission takes a small amount of
fish from the person for who she sold the fish. Thailama states ‘ ’I will take a few fish from
every batch of fish I sold ’’ If the auction woman have a particular percentage of fish they
take is unclear. All three of the auction women could not give an exact percentage or
amount of fish that they took. By triangulating interviews with fisherman this research
argues that the amount can differ per fisherman and per auctioneer but in most cases the
auction woman took around 1/30 of the amount of the fish. The fish which is gathered by
the auction women will be sold by themselves after the auction ends.
The fish auctioneers grant the fisherman another incentive to sell their fish through them.
They give bonuses to the fishermen that come to them with their fish. The interviewed
fishermen stated that the amount which is granted to the fisherman depends on the
connection between the fisherman and the auctioneer. Also the type of boat and the
amount of fish they catch throughout the year help to determine the amount of money the
fishermen get. Thailamai states ‘’ During a holy festival in January if will give money to the
fisherman’’. The amount varied between 2.000 for Catamaran fisherman and 5.000 for the
fibre boat. When you have almost 30 boats that deliver their fish to you this adds up to a
substantial amount of money. The woman auctioneers therefore take a loan with 3%
interest from a money lender. They live a large part of the year in debt. When the fisherman
accepted the money of the auction woman they also agreed to auction their fish through
her. All the fishermen that were interviewed and had accepted the bonus stated that they have one particular auction women through which they sell their fish. This suggests that
there is an informal contract between the fisherman and the auction women. Three
fishermen that were interviewed did not take the bonus from the auction women. A fibre
boat owner named Kumar states ‘’ I did not accept the bonus from the auctioneers. If you
accept the bonus the auctioneers will take more fish as commission. I also am independent
from the auction woman now’’. So this suggests that the bonus means that the fish
auctioneers will not only bind to the fisherman as their only auction woman but they also
take more commission. The auctioneers stated that they gave away money on more
occasions. Thailama states: ‘’Whenever a net of one of the fisherman gets destroyed or his
boat will get damaged I will give them some money for repairs’’. This suggests that the fish
auctioneers are of significant societal importance.
The interviewed respondents stated that traders that buy the fish are mostly small scale fish
vendors. The fish vendors that were interviewed said that they do not buy fish in bulk and
often buy fish for a price of around 500 rupees. After they buy the fish they wash the fish
and sell it near the road or in nearby villages that are significantly larger than Samiyar Pettai.
Male fish vendors often own a scooter which they use as transport to their destination. The
woman fish vendors take the bus. The towns in which they sold their fish where Cuddalore,
Parangipettai and Chidambaram. Some respondents stated that during the high season
sometimes vans of big traders would come to buy fish. When this happened the fish price
would increase because there was a steep increase in demand because the big traders
would buy the fish in bulk.
In some cases the motorized fibre boats went to sell their fish in the nearby harbour in
Parangipettai. This is a large harbour with a strong infrastructure, so large trucks from big
traders from Kerala and Bangalore come to buy fish. One of the fisherman stated ‘’The fish
price is higher there because there are more big traders. So when we catch a lot of fish we
go to sell in Parangi’’. If the competition of the Parangi Pettai harbour could be a significant
threat to artisanal fish trade is Samiyar Pettai can only be pointed out by further research.
Before the demonetization the fisherman and traders stated that the artisanal fish trade in
Samiyar Pettai was doing well. The fisherman and traders that were interviewed spoke of a
steady income and good prices for the fish. The fisherman in Samiyar Pettai mostly fish on
small pelagic fish. If they target certain species of pelagic fish depends on which season it is.
For example, during the field work a lot of fisherman stated that they fished on sardines in
particular. There were five groups with substantial differences in income. Namely, the
waged labourers, catamaran owners, motorized boat owners, auction woman and fish vendors. The different groups where for this research asked what their income was before demonetization. Some of the answers proved to be impossible but many answers from respondents corresponded with answers from respondents from the same group. Therefore
this research tends to give an indication of the income of the different groups. The mean
daily income is given for each group The labourers made in the period before
demonetization about 200-300 rupee depending on the catch. The interviewed catamaran owners owned 500 rupees daily. Fish seller earned about 400 rupees, same as the fish auctioneers. The fiber boat owners made around 800 rupees daily before demonetization.
Note that these incomes fluctuate greatly each day. The mean price for 1 KG of small pelagic
fish was around 100 rupees which is equal to 1,40 euro.
4.2 Artisanal fish trade during demonetization
In the interviews with respondents it became clear that the demonetization that was issued
by president Modi immediately had a significant negative impact on the artisanal fish trade
of Samiyar Pettai. A women fish vendor stated ‘’ Nobody wants to buy fish because nobody
has cash, I did not earn any money for over a month and I need to feed my family’’. All the
respondents that were interviewed spoke of lack or even absence of cash. This research
argues that due to the demonetization immediately a liquidity shortage occurred a in
Samiyar Pettai. The traders and fishermen stated that the liquidity shortage caused the price
of fish to decline sharply. This sharp decline of the fish price was caused by a decrease in
demand for fish. Because people did not have sufficient funds and did not have access to
cash they could not buy fish. A women fish vendor stated ‘’ Although I have fish to sell
nobody will buy it from me because nobody has sufficient cash, I can only sell the fish at a
very low price’’. This resulted in traders having no funds and thus a decline in the price of
fish because the supply of fish stayed almost the same as fisherman kept on fishing. It did
not matter if inhabitants of Samiyar Pettai had accumulated wealth or knew how to operate
a bank account. The banks were not available and people stood in line for days. Moreover,
when you had saved money it was mostly useless because 85 % of the money was not
accepted as legal tender. This research suggests that this is the reason that the whole sector
was influenced.
In addition to a shortage in liquidity there was another problem that made trading difficult.
Respondents claimed that there was a lack of change and a gap between the currency notes.
Whenever somebody was able to contract money from the bank they could only get a 2000
rupee note. Because the 500 and 1000-rupee note were discontinued almost nobody was
able to change money for a 2000 rupee note. There was a lack of 100 rupee notes. Traders
stated that the 100 rupee note became more valuable. This had severe consequences for the
artisanal fish trade in Samiyar Pettai.
Firstly, fisherman stated that their income declined sharply during demonetization. Because
the fishermen often needed to sustain a large household the well-being of many people
were affected. The same happened to the traders and the auctioneers. Because the people
they sold fish to also did not have sufficient cash and they knew that the fish sellers also
were desperate for cash they had a bad bargaining position. Many days the fish sellers
stated that they only made 50 rupees or even had no income. This also resulted in the
decline of fish sellers. Thailama states ‘’over 10 fish sellers stopped buying fish during
demonetization’ ’This research argues that due the decline in traders the fish priced declined
. The fish sellers were therefore significantly affected by the reduce in demand for fish. Many
fish vendors therefore stopped buying and selling their fish. A fish seller stated: ‘’Many days I
bought fish to sell in Cuddalore, but no one would buy the fish and I had leftover fish which I
needed to throw away’’. The fisherman stated that they did not have problems selling the
fish but did had a problem with the low price. This research argues that the income of fish
vendors was even more affected than that of the fisherman. As mentioned above they often
made very little to no money at all. The fish women that were interviewed often had to work
because their husband or children are unable to or deceased. Therefore the families of the
fish woman were also significantly impacted by the demonetization.
Secondly even when the people received money from the bank they stated it was very hard
to trade because they only had 2000 rupee notes. Furthermore the respondents claimed
that in everyday life they were affected by this limitation in trade. At the grocery shop and
the gas station they needed to buy commodities for a certain significant amount of money if
they wanted change. For example, when a person wanted to buy something for 100 rupees
in the grocery shop, the shop owner would demand that the person would buy for 500
rupees or he wouldn’t be able to change. This caused many people to eat government rice
and ration their food. Many respondents did not have access to vegetables and health care
was also difficult to entry without money. A fish vendor stated ‘’When I fell ill I did not have
the money to have sufficient health care, I have difficulties with breathing and I had to wait
for 1 month before I was able to acquire money and pay for treatment’’
The village responded to the demonetization in multiple ways. In order to deal with the
shortage of cash they switched to a credit-based trade system. Interviews with respondents
and observations of the fish trade helped to acquire information about how the trade system worked during demonetization. The system worked as follows. Whenever the fisherman sold fish through the auction woman the fish vendor that bought the fish opened
debt. They needed to even this debt with the auction woman. The fish vendors were granted
time to sell the fish and collect the money. The auctioneers stated that it usually took
around 3 or 4 days before they repaid their debt with the auctioneers. The auctioneers
would then pay the fisherman their money. In some occasions a fish vendor only managed
to acquire a 2000 rupee note. Kumar a female fish vendor told that she would then pay for
multiple fish vendors and they would her when they sold their fish. Kumar states ‘’ I would
pay the fish for multiple fish vendors, they would repay me if the sold the fish. I know the fish vendors so I know that they will repay me’ ’. This research suggest that the fibre boat owners had more problems coping with demonetization than the kattumaram owners, because they
needed more cash to keep their operation running. They needed cash to pay for gasoline
and to pay their labourers. Fisherman and labourers stated that the labourers often got paid
