Farmer Suicides and Agrarian Distress

FC PROJECT- SEM II FARMERS’ SUICIDES AND AGRARIAN DISTRESS 1988: â€Å"The peasants have started to flex the political muscles that their economic betterment has given them †¦ They have acquired the capacity to launch the kind of sustained struggle they have. It is going to be difficult to [†¦ ] contain them†¦ because they command the vote banks in the countryside to which every party seeks access†¦ A new specter of peasant power is likely to haunt India in coming years. † Editorial in Times of India, Feb 3 1988, following farmer agitations for higher prices and subsidies in Western Uttar Pradesh 005: â€Å"Agriculture [in India today] is an economic residue that generously accommodates non-achievers resigned to a life of sad satisfaction. The villager is as bloodless as the rural economy is lifeless. From rich to poor, the trend is to leave the village†¦ † Dipankar Gupta, The Vanishing Village 2007: â€Å"Rates of growth of agriculture in the last decade have been poor and are a major cause of rural distress. Farming is increasingly becoming an unviable activity. † Manmohan Singh, Prime Minister of India Introduction India is primarily an agricultural country. More than 60% of its population directly or indirectly depends on agriculture. Agriculture accounts for approximately 33% of India’s GDP. Agriculture in India is often imputed to ‘gambling with monsoon’. Farmers are heavily dependent on the monsoons for their harvest. If the monsoons fail, they leave the farmer under a heap of debt with no harvest, their only source of income. Unable to bear the heavy burden of debt, they see suicide as the de2003-2008. According to the National Crime Records Bureau (NCRB), there have been nearly 2 lakh farmer suicides since 1997. However, indebtedness is not the only reason for suicides. The suicides are a manifestation of the growing agrarian distress in India. It is clear from the current crisis, that the agrarian interest is marginalized in the national policy agenda today. Agrarian Crisis Falling productivity: Over the years the economy of India had undergone a structural transformation due to which the share of agriculture has been declining. However the workforce employed in agriculture hasn’t decreased. Accordingly, in 2004-05, the share of agriculture in GDP was 20. %, and yet the workforce employed in agriculture was still 56. 5%. This structural dissimilarity means that there is a large difference in the productivity of workers in agriculture and in non-agriculture occupations, productivity of workers in agriculture being one fifth of those in non-agriculture. Marginalization of peasantry: This high burden of labour force has, in addition, been falling on a slowly contracting cultivable land area. Between 1960 and 2003, the number of holdings doubled from 51 million to 101 million, while the area operated declined from 133 million hectares to 108 million hectares. This has led to a sharp decline in the average size of the holding, leading to increasing number of small and marginal farmers. Hence, the proportion of marginal landholders has increased from 39. 1% in 1960-61 to 71% in 2003, and among them they only operate 22. 6% of the land. This continuing skewed pattern of land ownership reflects the lack of serious land reforms. Increasing marginalization forces the farmers into sharecropping and renting additional land. This leads to difficulties like insecurity of lease, increasing costs and inadequate returns from production, and difficulties in accessing credit. Declining growth rates: Growth rates of agriculture have been on the decline. The growth rate by GDP from agriculture fell from 3. 08% during 1980-81 to 1990-91, to 2. 57% during 1992-93 to 2005-06. This included a dip to 1. 3% in 1999-2000 and even a negative growth of -2% in 2000-2001. Declining profitability of agriculture: The ratio of total prices received by the agricultural sector to the total prices paid by it to non-agricultural sectors is one of the important economic indicators to test whether agricultural sector as a whole has either gained or lost in the process of economic growth. Although the reforms in the 90s with policies such as devaluation of currency were expected to benefit agriculture and improve its relative terms of trade (ToT), this has not really been sustained. The barter and income ToT became favourable to agriculture from 1984-85 until 1996-97, but thereafter they more or less stagnated Likewise, the Input-Output Price Parity (computed by comparing the index of prices paid for agricultural inputs with the index of prices received for the outputs, has since 1994-95 remained lower than one hundred, indicating declining profitability of agriculture (Government Of India, 2008). Erosion of real incomes of farmers: When the prices received by the farmers for their crops are compared with the prices they pay for consumer goods (i. e. , Consumer Price Index for Agricultural Labour – CPIAL), it is observed that farmers are facing an erosion of real incomes because the growth in aggregate price index for consumer goods has been higher than the growth in price index for agricultural commodities (Govt. of AP 2007). This has resulted in declining relative living standards of farmers, particularly for small and marginal farmers whose incomes are clearly inadequate to meet consumption expenditure. Slowdown of exports: Exports flattened out after 1997 following the East Asian Crisis and the consequent large deceleration in growth of international trade in agriculture. Simultaneously, international prices started falling for most commodities, making Indian exports uncompetitive. Cheap imports have been on the rise with the removal of quantitative restrictions on agriculture by 2000. Changing cropping patterns: With the opening-up of the economy, expectations of export opportunities and higher world prices for agricultural commodities led many farmers to move into cash crops, away from traditional subsistence crops. Devaluation of the rupee made Indian exports cheaper and hence attractive on the world market, and further encouraged cultivation of cash crops. On aggregate, the total area of the country’s farmland growing traditional grains declined by 18% in the decade after 1990-91, whereas areas growing non-food crops of cotton and sugarcane increased by 25% and 10% respectively. Declining irrigation: Ironically, with a shift in cropping patterns towards more water intensive cash crops, the aggregate net irrigated area remained stagnant (GoI 2007). State governments have grossly neglected investment in surface irrigation infrastructure. Consequently there has been an increase in private investment in exploiting ground-water sources (mainly bore wells), which have been growing relative to canal and tank irrigation. This has led to overexploitation of ground water and a falling water table, forcing farmers to deepen their wells every few years, which is expensive. Disappearing institutions: The gradual weakening of state-support has also lead to dormancy of several state-run corporations, which used to provide support to the small-scale farmer. In AP, among these were the AP State Agro Development Corporation (APSADC) which manufactured and distributed agricultural machinery, tools and inputs at subsidized rates, and AP State Seeds Development Corporation (APSSDC) which produced its own seed, sold it. Agricultural Extension Service was also downsized. Credit squeeze The farmers perhaps most acutely feel the withdrawal of the state in the decline in institutional credit support. With agriculture becoming increasingly commercialized and costs of cultivation rising, most farmers look for external sources of credit. Institutional credit comes in the form of loans from commercial, co-operative, and regional rural banks. The nationalization of main banks in 1969 required them to prioritize lending to agriculture, with tight interest-rate controls. But this came to an abrupt end with the Narasimham Committee on Banking Reforms post-1991. Through various redefinitions of what constituted priority lending, the committee slowly squeezed credit lines to farmers. In AP the proportion of bank lending to agriculture fell from 43% in 1998 to 26. 7% in 2003, covering only one-third of the credit needs of the farmers. Even mandates of special lending to SCs, STs and very small farmers were revoked to pursue commercial viability and aggressive loan recovery. Tenant cultivators with insufficient titles are altogether denied access to formal credit. With this drying up of formal credit, the farmers are left with no choice than to depend on ‘informal’ sources for credit. An NSSO survey in 2004 revealed that 68. 6% of the total loans taken by farmers in AP are from the informal credit market. This credit typically comes at usurious interest rates (anything between 36% and 100% compound), and worse, from the same entrepreneur who is selling the farmer the seeds and fertilizers. This stranglehold of the trader-moneylender has become the root of much exploitation and misery. Credit from these agents is almost never in cash form. It is inputs (his own brand of seeds, fertilizers) issued against the future output whose price, invariably low and exploitative, is fixed by the agent himself. Farmer suicides Causes and Statistics The drying up of institutional credit and exploitative informal credit traps in the face of rising costs and declining profitability have led to pervasive indebtedness among farmers. The Situation Assessment Survey of Farmers in the 59th round of NSS in 2003 revealed that nearly half the farmers in the country were indebted. The incidence was higher in states with input-intensive agriculture like Punjab, Haryana, Maharashtra, Tamil Nadu, Kerala, and Karnataka, and was highest at 82% in Andhra Pradesh (GoI 2007). The cotton belt is where the suicides are taking place on a very, very large scale. It is the suicide belt of India. The share of the Big 5 States or ‘suicide belt’ in 2008 — Maharashtra, Andhra Pradesh, Karnataka, Madhya Pradesh, and Chhattisgarh — remained very high at 10,797, or 66. 6 per cent of the total farm suicides in the country. According to a study by the government of Maharashtra, almost 6 in 10 of those who kill themselves had debts between $110 and $550. Indebtedness, along with the constellation of input and output risks elaborated above has been putting the farmer under sustained duress. A tragic manifestation of this has been the phenomenon of suicides among desperate farmers. Since 1995, farmer suicides have been reported regularly from Andhra Pradesh, Maharashtra, Punjab, Kerala, Karnataka, Chhattisgarh, Tamil Nadu, Pondicherry, Dadra & Nagar Haveli, Delhi, Goa and Sikkim. A Durkheimian study of the suicides concludes that the marginalization of the rural sector in the national policy agenda which prioritizes rapid economic growth is leaving rural producers with a feeling of socio-economic estrangement from the community, and that the suicides were an effect of individualization of this estrangement. After Suicide Farms are confiscated due to inability to pay back high interest loans. Corrupt moneylenders harass the families. Widows are burdened with the new responsibility as the sole breadwinner. Children sometimes lose both parents to suicide, forcing their education to a alt, especially if they have to work in order to provide for their needs. Economic packages are provided to the farmers. But due to corruption the help never reaches the family. Conclusion and Recommendations: All over the world the impact of an industrial approach to boosting crop yields has stripped many small farmers of their self-sufficiency and thrown them into despair. A few r ecommendations are as follows: ?Input costs should be reduced. ?Markets must be made available for agricultural produce. ?A good market price must be provided for agricultural products. For farmers, credit should be made available at low interest rates. ?The extension system should be revived to solve problems in the field. ?There should be a proper system to address the issue of water scarcity. ?Adequate water for irrigation should be provided. ?Conserve Agro Bio -Diversity in Gene and Seed banks. ?Increase budget outlay for Agriculture in every Five Year plan of the Government of India. ?Agricultural land should not be given to SEZ. ?The use of Genetically Modified Seeds should be stopped and organic agricultural practices encouraged. Farmers' Rights law to be implemented immediately. ?Investments should be made to restore soil health. 2007: â€Å"The problem cannot be solved through economic packages alone. What is needed is social and spiritual interventions so that the farmers realize that suicide is not the way out†¦ they should understand that they need to develop self confidence. The future generation should have the mental strength to face life's challenges. † Amma REFERENCES http://agrariancrisis. in/ http://wikipedia. org/ http://www. councilforresponsiblegenetics. org/