Farmer Suicides in India: A Policy-induced Disaster of Epic Proportions

January 15, 2012

By The Sanhati Collective

1. Introduction

Since 1995, more than 253,000 farmers have been reported to have committed suicides in India, making this the largest wave of suicides in the world. Other than a few conscientious journalists like P. Sainath and Jaideep Hardikar, the mainstream media has largely ignored this historically unprecedented event. Busy with crafting a palatable picture of “shining” India, the mainstream media has neglected its duty to report on the lives and livelihoods of the largest group of working people in India: farmers. The Indian government’s actions on this issue has been equally, if not more, deplorable. Other than making vapid pronouncements and organizing high-publicity visits of Prime and Chief Ministers to the region, the Central and State governments have done little to ameliorate the conditions of the miserable farmers. No wonder then that the abominable phenomenon of farmer suicides continues with unmitigated ferocity. As a reminder that business-as-usual means disaster for the aam aadmi in Shining India, it was recently reported in the press that a fresh wave of suicides have occurred in various states in India in 2011 [1].

2. The Aggregate and State-level Facts

To put matters into perspective Sanhati has collected and analyzed farmer suicide data from the National Crime Records Bureau (NCRB) for all the Indian states between 1995 and 2010 [2]. Figure 1 presents an annual time series plot of the total number of farmer suicides reported in India between 1995 and 2010 at the all-India level and for the top 8 and top 4 states.

Two patterns are visible in Figure 1. First, for the all-India numbers as much as for the top 8 and top 4 states, there is an overall trend of increasing farmer suicides between 1995 and 2010. While it is true, and a welcome development, that there is a break in the increasing trend line in the mid-2000s, the overall figures in the late-2000s are way above the numbers in the mid-1990s. At the all-India level, total farmer suicides reported in 1995 was below 11,000; in 2010, it was hovering around 16,000.

Second, and more problematic, is the fact that the 4 states that account for about two-thirds of the total farmer suicides in the country show a very very mild decline since the mid-2000s. The trend line for these 4 states have basically flattened out since the mid-2000s, highlighting the fact that the states with the highest incidence of farmer suicides have not made much progress. This fact must then temper the optimism, if any, arising from the decline in the all-India numbers since the mid-2000s.

Let us now turn to a more disaggregated analysis of these overall figures by looking at the top 8 and top 4 states, as a group, in some detail. Figure 2 presents the time profile of farmer suicides in the 8 states that have consistently witnessed the largest number of farmer suicides in India, accounting for about 66 percent of the all-India total in 2010 (the recent most year for which data is available at the NCRB website). In descending order of farmer suicides in 2010, the states are: Maharashtra, Madhya Pradesh (including Chhattisgarh), Karnataka, Andhra Pradesh, West Bengal, Kerala, Tamil Nadu and Uttar Pradesh. Two patterns are visible in Figure 2.

First, there is an overall trend of increasing farmer suicides in these 8 major states between 1995 and 2010. In 1995 and 1996, these 8 states together had reported a total of 8988 and 11715 farmer suicides respectively; in 2009 and 2010, the corresponding figures were 14431 and 13591 respectively. While the total for these 8 states has declined a little from the phenomenally high numbers in the mid-2000s, the total remains much higher than what was reported in the mid-1990s.

Second, there is a clear division among these 8 states into two groups. The first group consists of Maharashtra, Madhya Pradesh (including Chhattisgarh), Karnataka, and Andhra Pradesh. These 4 states are in a league by themselves, reporting more than 2000 farmer suicides per year over the last two years, and accounting for 62 percent of the total farmer suicides in the country between 1995 and 2010. Most alarmingly, the trend of farmer suicides within these 4 states, accounting for two-thirds of all the farmer suicides in the country in 2010, is increasing over time. While Maharashtra reported lower number of farmer suicides compared to the astronomical highs in the mid-2000s, the others have continued their upward trend. Moreover, even Maharashtra reports much higher suicides today compared to the mid-1990s. Hence, the overall trend in this group of 4 states is increasing over time.

The second group consists of West Bengal, Kerala, Tamil Nadu and Uttar Pradesh. In recent years, these 4 states have accounted for about 20 percent of all the farmer suicides in the country and have consistently reported between 500 and 1000 farmer suicides every year, with Uttar Pradesh reporting the lowest figures. The trend among these 4 states, for the period between 1995 and 2010, is flat. These states have witnessed some declines since the early 2000s, but that has only brought them to levels that they reported in the mid-1990s. Over the whole period since 1995, these states do not show any significant decline in the number of farmer suicides. The reader’s attention hardly needs to be drawn towards the irony that two of these states, West Bengal and Kerala, had been ruled by “communists” for the whole or significant parts of the period under consideration. The fact that West Bengal figures consistently among the 6 “top” states in terms of farmer suicides flies in the face of all claims by CPI (Marxist) sympathizers that the mainstream left has been more farmer-friendly than other bourgeois political parties in India.

To sum up: more than 253,000 farmers have been reported to have committed suicides between 1995 and 2010; the actual number is likely to be higher because of deficiencies in reporting suicides. Four states account for about two-thirds of these suicides: Maharashtra, Madhya Pradesh (including Chhattisgarh), Karnataka and Andhra Pradesh. Another four account for a fifth of all the suicides: West Bengal, Kerala, Tamil Nadu and Uttar Pradesh. Even though the all-India number of farmer suicides have declined slightly since the mid-2000s, the 4 states that account for most of the farmer suicides have not shown much decline.

3. Data Scepticism?

Faced with these disconcerting facts about the high rates of farmer suicides in Indian states (especially Maharashtra, Madhya Pradhesh, Karnataka and Andhra Pradesh), the sceptic will naturally ask: how do we know that these people died primarily due to farm distress, and not due to other reasons? After all the data which are being used in support of the claim are from the NCRB (National Crime Related Bureau) report “Accidental Deaths and Suicides in India.” Surely there are many suicide deaths enumerated in the report which had little to do with agricultural performance?

While admitting that all suicide deaths in the farming community are not due to agrarian crisis, the link between crisis and suicides can be tested if one examines the rate of farmer suicides, and try to discern qualitative changes in its magnitude over time. If the trend value of this parameter has been more or less constant over a long period of time, with only abrupt fluctuations in few years, one can reasonably conclude that the observed high rates of suicides in the farming community may be temporary aberrations caused by idiosyncratic reasons which has little to do with long run phenomena such as agrarian crisis. The suicide rate would eventually converge to the general national trend. On the other hand if there has been a rise in suicide rates among farmers and one observes long run persistence of these high rates, there are reasons to believe that many of the suicides are due to systemic causes related to agriculture.

Srijit Mishra (2006a) of the Indira Gandhi Institute of Development Research (IGIDR) in Mumbai has calculated these numbers through an interpolation exercise. Table 1 reproduces the relevant data that relates to the suicide mortality rate (SMR) in some select years. SMR is defined as the number of suicides per 100000 population. The table shows a marked increase in the rate of male farmers’ suicide, which appears to be sustained, at least for the periods for which the calculation was made.

Table 1: SMR for Indian farmers, according to sex

Another important parameter in this context is the ratio between farmers’ and non-farmers’ SMR. Table 2 presents data on the ratio of farmers and non-farmers’ SMR for India and a few select states for male farmers.

Table 2: Farmer SMR/Non-farmer SMR of India and select states (male farmers)

Considering mid-1990s as the beginning of the suicide epidemic, it is apparent that at an all-India level the relative SMR of farmers has gone up in the subsequent years. However, the rise is not remarkably high at the national level (rising from 0.77 to 1.03 between 1995 and 2001). At the level of states, Punjab had undergone high suicide incidents in the initial years, but managed to lower the rate subsequently. In Andhra Pradesh and Karnataka there were fluctuations over the years, though the ratio seems to have certainly gone up over the years. But Maharashtra stands out. It has not only had the highest value among these states, a ratio of 2.27 in 2001, but more ominously, the growth seems to have been steady over the years (climbing from 0.82 in 1995 to 2.27 in 2001).

Summary: the evidence regarding the ratio of suicide mortality rate for farmers and non-farmers across Indian states clearly establishes that the spate of farmer suicides can neither be considered a temporary phenomenon, nor can it be considered part of the “ordinary” suicide deaths in the country. Data scepticism about farmer suicides cannot be sustained.

Turning now to an analysis of the factors that underlies the largest wave of suicides in history, we will proceed in two steps. In the first step, we will present the analysis at the aggregate level, looking at macroeconomic factors and policy changes. In the next step, we will present a more disaggregated picture, looking at two cases studies – cotton in Vidarbha (Maharashtra), and coffee & spices in Wayanad (Kerala) – that provide details about the factors at work. The conclusion that emerges from this two step study is the following: farmer suicides is a straightforward case of a policy-induced disaster; policy changes under a neoliberal dispensation (starting early to mid-1980s) leads to the phenomenon of farmer suicides via the route of acute agrarian distress.

4. The Aggregate-level Picture

To understand the macro-level linkages running from policy changes to the phenomenon of farmer suicides, we need to ask: what is leading such a large number of farmers to commit suicides? The simple answer is: agrarian distress. Farmers (and sometimes their family members) are committing suicides due to the acute distress they are facing. Our next question is: what is causing such acute distress among farmers? Large, mounting and unsustainable levels of indebtedness. Which brings forth the next question: why are farmers becoming increasingly indebted? Because their incomes are systematically falling below their expenditures. Thus, we are led to the simple conclusion: to understand the phenomenon of unprecedented farmer suicides we need to understand the patterns and sources of income & expenditures of the vast majority of farmer households.

4.1. Stagnant Revenues

Why has income from agricultural production been dwindling? Quite simply because revenues have been stagnant (or falling) while costs of agricultural production have gone up. Revenues have been stagnant because of a complex set of factors. Let us take them up one by one.

First: yield (i.e., crop output per unit of land) growth of most crops have stagnated. This is the direct result of the increasing pressure on cultivable land: the total area under cultivation has declined while the number of operational holding have increased, implying that each operational holding is now much smaller than in the early 1960s. Between 1960-61 and 2003, the total number of operational holdings increased from 50.77 million to 101.27 million. During the same period, the total operated area declined from 133.46 million hectares to 107.65 million hectares. Thus average operated area declined from 2.63 hectares to 1.06 hectares. (NSSO,Some Aspects of Operational Land Holdings in India, various issues)

On top of this is the fragmentation of each holding into multiple plots. Thus, the declining size of operational holding, along with continued fragmentation, has meant smaller production units in terms of land area. This constrains the ability to use improved technologies of production, and has been one of the main reasons behind the stagnation of yield growth.

Second: due to the neoliberal policy orientation and the neglect of the rural sector, agricultural research and extension services have virtually disappeared from the country; thus new and better crop varieties have not reached the farmer. Along with this, irrigation (surface water) infrastructure has been neglected, and soil improvement and management efforts have been drastically curtailed. Compounding this has been the excessive use of fertilizers in several areas of the country that saw the so-called Green Revolution. All this has led to degradation in the quality of the soil, and contributed to the stagnation of crop yield growth.

Third: gradually doing away with import restrictions has meant a flood of low price agricultural imports (the low prices from US and European countries being supported by massive subsidies in those countries). By a perverse turn of policy, the minimum support price (MSP) for many crops have been kept below market prices. Both these factors have put downward pressure on crop prices, especially for smaller farmers who lack storage and transportation facilities (and have to sell to the local trader right after harvest).

4.2. Rising Costs of Cultivation

Let us now turn to costs of agricultural production and see why they have been rising over the past two decades. One of the main reasons behind the rising costs of cultivation is the gradual change in crop patterns that have been directly and indirectly induced by policy changes. Lifting of export restrictions and entry of multinational corporations have encouraged to farmers that they could shift from traditional crops (like rice, wheat, pulses, etc.) to cash crops like cotton, potato, tomato, etc.

Cotton is the quintessential crop that lies entwined with the wave of farmer suicides. So, let us take a closer look at cotton. Production of cotton requires large capital outlays, large in comparison to typical earnings of farmer households. Seeds need to be bought from the market every year (because of restrictions put in place by the MNCs selling the seeds); large quantities of fertilizers and pesticides are also needed (whose prices are increasing because of reduction of subsidies). Cotton cultivation (like most other cash crops) is very water intensive. Since, during this same period, provision of irrigation was being systematically reduced, farmers had to make investments in bore well (tube well) technology to secure the supply of ground water. This involved substantial outlays, most of the time a sum that was far beyond the reach of the average farmer. Taken together, these factors implied increasing costs of cotton cultivation.

Most of the time, these costs (especially the large outlays required for tube wells or even the buying of seeds, fertilizer and pesticides that was part of the cotton cultivation package) could only be met with credit. The credit was provided by the same agency (often a branch of some MNC like Monsanto) that sold the seeds, the fertilizer and the pesticide, along with the knowledge that was required to carry out the cultivation. With such interlinked markets, there was a serious conflict of interest in the sense that the agency would almost always “advise” farmers to use much more than the optimal quantity of inputs.

4.3. Rising Essential Expenditures

The same neoliberal policy framework that reduced subsidies on fertilizer and diesel (and petrol), let the irrigation infrastructure gradually go to the dogs, opened up the import and export of agricultural crops, increased the cost of electricity, also reduced the rural component of development expenditures. For instance, gross fixed capital formation in agriculture as a share of GDP declined from 3.1% during the late 1980s to 1.6% during the last part of the Ninth Plan period. Again, and probably more relevant for our purposes, the share of plan expenditures devoted to the agricultural sector fell from 13.1% to 7.4% during the same period (GOI, 2006, pp. 37). This meant that the burden of health care, social security and educational expenditures now fell on households, including poor farmer households.

Put the three components of the story together and you can see how vulnerable to shocks the poor farmer households became. If there was a medical emergency in the household or if there was an important life event (birth, marriage, death) or if there was a crop failure due to weather shocks of growth of pests, the household had to per force incur debt. This debt, it must be remembered, is in addition to the debt that the farmer would already have incurred if he/she had decided to move into the cultivation of cash crops like cotton. But where could the farmers turn to for credit at such times?

4.4. Dwindling Institutional Credit

After nationalization of the banking system in 1969, there was an impressive expansion of credit to the agricultural sector. The share of agricultural credit in total bank lending nearly doubled from around 10% in the mid-1970s to about 18% in the late 1980s. Financial liberalization, an important part of the neoliberal policy regime, reversed this trend. The share of agricultural credit in total bank lending declined from the peak of 18% in the late 1980s to about 11% in 2005 (GOI, 2007). The decline has continued since then.

Financial sector reforms also struck down the policy of branch expansion to rural areas in the mid-1990s. The result has been along expected lines: rural branches of commercial banks has declined from 51.2% in March 1996 to 45.7% in March 2005. Data also shows that the share of agricultural credit cornered by farm sizes of more than 5 acres has increased (GOI, 2007).

With institutional sources of credit drying up as a direct result of policy changes, farmer households, especially small and marginal farmer households, were pushed into the lap of the new breed of moneylenders, including the so-called micro finance institutions (MFIs). Interest rates charged by these sources were very high if not outright usurious. Thus, debt-service payments became an important, and increasingly large, component of monthly household expenditures. With mounting debt came the pressure of monthly payments. And, if for some reason cash flow problems emerged (for instance, due to a crop failure), it increased the stress on the household enormously. In extreme cases, it led to loss of face, despair and suicide.

To summarize: the adoption of the neoliberal model of capitalism by the ruling elite in India since the early 1990s have led to distinct aggregate-level institutional and policy changes related to public investment, input subsidies, organized credit and external trade; these policy changes have negatively impacted on the incomes of small and marginal farmers while their essential expenditures have continued increasing. Stagnant incomes and rising expenditures have led to pressures of mounting debt, creating acute distress that often lead to the extreme step of suicide.

5. Case Studies

With the aggregate picture more or less clear, we now turn to detailed case studies. The crop which attracted the most attention with regard to the discussion on farmers’ suicide is cotton. Incidences of what we might call “cotton suicide” have been a pan-Indian phenomenon. From Punjab in the north to Karnataka and Andhra Pradesh in the south, cotton deaths cover broad swathes of land cutting across the heart of rural India. The state that was most severely affected by cotton suicides is Maharashtra. In particular, the eastern part of the state, the Vidarbha region, has the dubious distinction of being the farmer suicide capital of India. Connecting up with the discussion of aggregate trends and policy changes that we presented in the previous section, we now present two case studies: (a) what went wrong for Vidarbha cotton farmers, and (b) how the wave of suicides came crashing in coffee and spices farming in Wayanad, Kerala.

5.1. Case Study 1: Cotton Crisis in Vidarbha, Maharashtra

Let us begin by asking a geographical question that will allow us to narrow down on Vidarbha: was farmers’ suicide a pan-Maharashtra phenomenon? An examination of intra-Maharashtra data shows that there are important regional variations. It is the eastern part, the Vidarbha region in particular, that has been the worst affected. Table 3 shows the SMR of farmers (divided into males and females) in different divisions of Maharashtra for the years 2001-04. We also present the data on SMR of farmers as a ratio of SMR of the population of different divisions according to sex in 2001-04 (Mishra 2006b).

Table 3: SMR in different divisions of Maharashtra (2001-04)

As can be seen from Table 3, Nagpur and Amravati were the only divisions where the male SMR was higher than the state average. It is no surprise that these two divisions constitute the Vidarbha region, the farmer suicide capital of India. To delve into the dynamics of farmer suicides, therefore, we focus on the Vidarbha region and concentrate on the crop whose failure triggered the suicide of the growers: cotton.

Vidarbha grows many crops such as jowar, tur, and soya bean, other than cotton. But it is the cotton farmers on whom the spate of suicides has been taking the heaviest toll. From different reports and studies, as we have indicated in the first part of this article, it appears that the reasons behind the agrarian crisis are systemic in nature. The crisis is a result of policy decisions which have blown away the protective covers for farmers — in particular small and poor cotton farmers — against highly subsidised imports and unscrupulous traders. A planning commission report concludes, “[t]he physical field tour had given ample evidence of distress due to lack of procurement of cotton, loss due to lower price realization, and low yield.” (GOI, 2006) We probe these and other related factors in the following sections.

Figure 3: Map of Maharashtra: the eastern most two divisions of Nagpur and Amravati constitute the Vidharbha region

5.1.1. State Procurement: Maharashtra had a programme for procurement of cotton since 1972-73. The purpose of the Monopoly Cotton Procurement Scheme (MCPS) was to ensure a stable price to farmers. However, with liberalisation and opening of trade, operation of the MCPS was curtailed. It is true that the Maharashtra Government was incurring high losses due to these operations. Serious problems had emerged in the form of middlemen between the farmers and MCPS who appropriated parts of the subsidy that should have gone to farmers. But the losses of the MCPS seem to be a function of other policies as well (like the ones stated below), which depressed the open market price and inflated the subsidy bill, rather than the inefficiency of farmers. But whatever the reason for the losses of the MCPS, it was the farmers who had to bear the cost when the procurement operation was folded up. In 2004-05, cost of production of cotton in Maharashtra was Rs. 2,216 per quintal according to CACP (Commission on Agricultural Cost and Price). The minimum support price offered by the MCPS was Rs. 1960. The minimum support price was below the cost of production!

Table 7: Cotton Procurement in Maharashtra

Table 7 shows the sharp drop in procurement prices announced by the Maharashtra Government. It fell from Rs.2500 a quintal in 2003-04 to Rs.1960 in 2004-05. Hence it is clear that this error at the level of policy, which slashed procurement prices even as cost of cultivation (and hence open market price) went up, spurred the crisis. The Planning Commission report notes, quite tellingly, that “the immediate trigger of present distress was the sudden shock faced by the farmers due to the withdrawal of monopoly procurement which had been in vogue for over the past two decades.” (GOI, 2006)

The last column of table 7 lists the magnitude of procurement. As can be seen, this has fluctuated substantially. In 2003-04 procurement actually ceased. This suddenly jumped up to 45 lakh bales the very next year! Aside from the general withdrawal of the State (of which the curtailment of procurement was an instance), policy inconsistencies seem to have added to the uncertainties faced by cotton farmers.

5.1.2. Trade Policies:

It is widely believed in policy circles that with the dismantling of trade barriers, the field of competition becomes even. On the level playing field where none has an undue advantage, the most efficient producer wins, ultimately benefiting consumers. Based on this laudable premise, and trade theories based on invalid assumptions, India started to do away with trade restrictions. Quantitative restrictions on imports were removed, and import tariffs were drastically reduced. But instead of giving equal opportunity to all farmers of the world, this policy move dealt a heavy blow to the cotton farmers in Maharashtra. This is because US and Europe provide huge subsidies to their farmers. This subsidy enables US and Europe to sell their agricultural products at a price below the cost of production, thus undercutting farmers in India (and other parts of the Third World). Table 4 gives comparative figures of agricultural subsidies in India and developed countries for the year 1999 to back up this claim. As can be seen from the table, the average subsidy per hectare in the OECD countries is about 4 times the subsidy that an Indian farmer gets. According to a recent study, during the period 1998-2003, export price of US cotton was less than half the cost of production. No wonder the level playing field is a little too steeply inclined!

Table 4: Agricultural Subsidies in Developed Countries and India in 1999 (US $, at 1986-88 prices)

Added to the element of subsidy were other important factors which queered the pitch for Indian, and in particular Vidarbha, cotton farmers. First, compared to average global yields (i.e., output per unit of land), cotton yield in India is not impressive. Even Pakistan grows more cotton per hectare than India does as data in Table 5 show. China’s yield is nearly thrice that of India’s. Second, within India, Maharashtra is a rather low yield state, although it has the highest area under cotton cultivation (see Table 6 for details). Yield in Maharashtra is half the yield of many other states like Andhra Pradesh and Gujarat. Cost per unit is also relatively high in Maharashtra, which means profit per unit is substantially lower. Thus, when subsidised cotton from US and Europe flowed into the domestic economy and depressed cotton prices, this had a particularly devastating effect on the cotton farmers of Maharashtra. And within Maharashtra, Vidarbha was most severely hit because Vidarbha’s biggest cash crop is cotton.

Table 5: Cotton yield of select countries (2003-04)

Table 6: Cotton yield of select Indian states (2005-06)

5.1.3. Harvest Failure:

2004-05 was a particularly bad year for Amravati division in Maharashtra. There was deficient monsoon in a number of districts: Wardha was 22% rain deficient, Washim 31%, and Yavatmal 51%. This meant that a part of the cotton crop withered on the field. But on the other hand, there was a record harvest of cotton at the national level. This pushed down the price. Squeezed from both sides, on the one from low price and on the other from low output, many farmers went into debt. They could have recovered, had the next year been any good. However, when procurement price plummeted the next year and procurement volumes were drastically cut, farmers were pushed to the wall. For many farmers, suicide turned out to be the last rational decision in the face of constant harassment by local money lenders and cooperative bank agents. A field study by Mishra (2006b) indicates that a majority of the farmers who committed suicide had undergone a deterioration of social position before the act.

While a deficient monsoon is certainly bad for farmers, the overall impact of rainfall deficiency in Vidarbha was so disastrous because it was magnified several fold by a host of other factors. These magnification factors were (a) the widespread adoption of Bt cotton, (b) the contraction of organized credit, and (c) the lack of irrigation facilities.

5.1.4. Bt. Cotton:

Bt. Cotton seeds are arguably a superior variety compared to the non-Bt. ones because Bt. cotton has far higher yield (12 quintal per hectare) compared to the desi variety (7 quintal per hectare). Consequently the return per hectare is also higher at Rs 12677 for Bt. compared to Rs. 4290 for the desi variety (GOI, 2006). This may have attracted many unwary farmers into switching from non-Bt. to Bt. varieties. In 2002-03 only 0.4% of the land under cotton cultivation was using Bt.; this had jumped to 15% by 2005-06. The flip side, never emphasized by the private seed sellers, is that the cost of production is also higher for Bt. cotton. The cost of the seed is itself three times higher for Bt. than for the desi variety. There are additional concerns that the multinational corporations are making supernormal profits out of it [3].

But aside from all this, Bt. cotton has been reported to perform well only under certain conditions. Irrigation is one of them. In Maharashtra, most cotton farms are entirely dependent on rainfall, with only 2% to 3% being irrigated. Hence, when the monsoon failed, Bt. cotton crop became particularly vulnerable. It is to be noted that besides irrigation, Bt. cotton requires regular supply of other inputs, such as pesticides, and fertilisers. In short, although Bt. cotton gives a higher ratio of revenue and cost, the cost per hectare is much higher than the desi variety. The substantially higher cost of production required large amounts (i.e., large as a ratio of average farm incomes) of borrowing, thereby increasing vulnerability and leading to suicides when the crop failed.

5.1.5. Organised Credit:

A survey found that farmers committing suicides had a higher pending debt obligation than farmers who did not commit suicide (refer to Mishra, 2006b). It is well known that debt burden features as the topmost reason for suicides among farmers. Of course it is not the case that farmers who took their life depended only on moneylenders. In fact, their biggest creditors were commercial banks, and cooperative banks. But it is also true that compared to farmers who did not commit suicide, these farmers had substantially higher debt obligations to the moneylenders. Much along expected lines, the rate of interest on such unorganized loans is significantly higher, ranging between 25% to 50% for a period of four to six months.

It is important to keep in mind that, to the extent needed, organised credit is not reaching the farmers of this region. Many cooperative banks have become dysfunctional because the number of defaulters have grown in the face of crisis. Contraction of organized credit interacted with commercialization of seeds to give birth to a new breed of moneylenders: input traders (i.e., traders who sold seeds, pesticides, fertilisers, and other inputs for agricultural production). Since interlinking of credit, input and output markets is a well known territory of exploitation in developing countries, the whole mechanism kicked in. Furthermore, due to dearth of extension services provided by the government, it is the traders on whom farmers depended for counselling, leading to a serious conflict of interest, and resulting in the purchase of unreliable seeds and inputs. Indeed, the springing up of dealers selling spurious inputs has much to do with lack of government oversight, and was one of the important components underlying the dynamics of farmer suicides in Vidarbha.

5.1.6. Irrigation:

Vidarbha is not particularly fortunate as far as receiving government support is concerned. It has 21% of the population and 29% of land area of Maharashtra. But it accounts for a very high percentage of the overall backlog for state expenditure in irrigation. Table 8 shows the figures of backlog percentage calculated by different government appointed committees over the years.

Table 8: Region-wise backlog in development expenditure in irrigation in Maharashtra (in Percentage)

As can be seen, backlog spending figures for Vidarbha are not only considerably higher than in other parts, but the gap has been rising over the years. The accusation of neglect and discrimination which is so often heard in Vidarbha is perhaps not without a sound basis in facts. The implication of the backlog in development expenditure has important implications. Because of low public development expenditure in irrigation, aggregate irrigation facilities in the region are low compared to the rest of the state (because, in general, public investment in agriculture “crowds in” private investment). Table 9 presents the data for pumpsets per thousand hectares of cropped area. As can be seen, other than Konkan, which anyway receives ample rainfall, it is the Vidarbha region which has pumpsets (per thousand hectares of land) far below the state average. The dearth of irrigation facilities has compounded the crisis in cotton as uninformed farmers adopted expensive Bt. cotton seeds which does not do well in erratic rainfed conditions.

Table 9: Agricultural pumps in Maharashtra, region-wise, as on 31.03.2005

Behind the series of dry statistics presented here are the loss of lives and livelihood of farmers, caused by a pervasive crisis in agriculture. The destruction of agricultural livelihood has a chain reaction on other facets of the local economy. Local business, trade & commerce, schooling of children, local manufacturing sector etc. get severely hit. The interesting, and infuriating, part of it all is that much of this tribulation was neither inevitable nor accidental. These are the direct results of policies as we have argued throughout this article. The total number of suicides in Maharashtra has declined from their level of mid-2000s of more than to 4000 per year. But even the current number of suicides is quite high. In 2010, 3141 farmers committed suicide in Maharashtra. That is more than 8 persons per day. Hardly a cause for celebration!

5.2. Case Study 2: Crisis in Coffee and Spices in Wayanad, Kerala

In 2004-05, around 150 farmers in the prosperous north-eastern Kerala district of Wayanad committed suicide. Numerically, this is not significantly large compared to the Vidarbha suicides. But analysing the case is useful because it throws up interesting common patterns across regions and crops. Here, we will briefly present some characteristic features that underpinned the mass human tragedy in Wayanad.

In Wayanad district of Kerala, coffee farming accounts for 70,000 hectares of land, and employs 60,000 small growers. In 2006, price of coffee crashed to Rs. 24 a kilo from a level of more than Rs. 130 a kilo a few years earlier. Price of raw cherry declined from Rs.70-Rs.80 to Rs.15-Rs.16 a kilo. As P. Sainath reports, coffee growers of Wayanad lost nearly Rs. 800 crores within a brief span of four years. This does not however mean that the price of processed coffee has also crashed. Martin Khor of the Third World Networknotes that in “…1992 producer countries earned $10 billion from a global market worth around $30 billion. In 2002, they made less than $6 billion in a market that had doubled in size.”

What stands between, on the one hand, the prosperity of the global coffee market and, on the other, the misery of its growers is a thick layer of cartels and monopoly trading houses. The Third World countries which produce coffee are given a raw deal by multinational companies. Market power at both ends allow the MNCs to sell the final product at a high price while pushing the price at which they buy from the third world growers to phenomenally low levels. Moreover, there is the added element of playing one Third World country against another when they face labour resistance in one country. Sainath reports,

Wayanad briefly saw a great rise in prices in the late 1990s when frost hit the Brazilian crop. “And also because,” says a senior Government official who has tracked exports for two decades, “of sheer rigging. Four major companies dominate the world market. When faced with a worker’s strike in Brazil, they hike prices for Kerala coffee. So there’s a boom. When the crushed Brazilians return to the fields, the companies pull the plug on us. Now they have two major, cheap sources.”

Why can local producers not process their high-quality produce and sell it in the market? After all, the high priced branded coffees that dominate the market are much inferior in quality compared to the local product. Apparently then, the bulk coffee buyers close ranks to exercise monopoly power. In short, growers face boycott from the buyers (firms in the coffee processing industry) if they try to directly sell in the market.

The crisis in Wayanad was deepened by other highly-valued commercial crops undergoing a crisis at around the same time as well. Wayanad produces a very quality pepper which fetched Rs. 270 a kg. a few years prior to 2005. But the price of this pepper plummeted to Rs. 60 a kg by 2005. Vanilla crashed from Rs. 4000 to Rs. 130 a kg. Cardamom price also dropped by around 75% over the same period. The entire district has lost around Rs.10000 crores in five years in total. Out of all spices, pepper economy has been really big. It is estimated that for pepper and coffee together, the loss in revenue due to the price crash has been about Rs.6000 crores. So what have been the specific factors behind pepper’s woes?

Besides disease and drought, what broke the back of the farmers are government policies of removing trade restrictions. Imports from SAARC countries are allowed at zero percent duty. Consequently low grade Sri Lankan pepper has swamped the market. Imported pepper is mixed with the high grade Wayanad pepper and sold in the Indian market. It is true that regional trade blocs like SAFTA has its merits. But what has actually transpired in the case of pepper is that inferior quality, low-priced pepper from non-SAARC countries (for instance, Vietnam, and Indonesia) is being routed through Sri Lanka into India.

The inflow of low-priced pepper has brought down the market price of pepper from Rs. 27,000 a quintal to Rs. 5000 a quintal in 2004. The massive drop in price has had an enormous adverse effect on the revenue earned by farmers. This has pushed up their debt levels. Deep in debt, farmers try to cut losses by curtailing production, which thrusts them deeper into penury. Taking one’s own life in such times appeared to many as the best choice available to escape harassment from banks and moneylenders.

As in other cases of agrarian crises, Wayanad’s local economy got disarrayed in the wake of the price crash. Ever since, local business is in the doldrums. Shops, and cinema theatres have closed, trade and commerce has plummeted. The crisis has had a major effect on local labour markets and migration. On the demand side of the labour market, as production suffered there were fewer jobs available for farm labourers. On the supply side of the labour market, many owner-farmers joined the rank of wage labourers to make ends meet. This raised the supply of labourer and lowered the chances of finding a job even further. In short, not only were fewer days of work generated by the local economy, even wage rates fell as supply of labour outstripped its demand. Naturally, then, migration increased. Farm labourers, and small owner-farmers migrated across the state border to Karnataka. P. Sainath reports that the number of trips by government buses has gone up considerably, from 3 to 4 about five years ago to 32 a day in 2005. Do they earn a better livelihood now? In Karnataka farms the wage was about 30% lower than what they once earned in Wayanad. If we include the price of the bus ticket, the over all income has declined substantially.

6. Conclusion

In this article we have argued that the wave of farmer suicides that have swept across India since the mid-1990s is a plain and simple case of policy-induced disaster of epic proportions. Adoption of neoliberal policies like reduced public investment in agriculture, withdrawal of institutional credit to rural areas, opening up the agricultural sector to global trade, neglect of irrigation facilities and allowing the rampant commercialization of agricultural inputs, have contributed to the development and deepening of acute agrarian crisis. The build-up of farmer debt is a direct result of the deepening agrarian crisis, and the wave of farmer suicides is a direct outcome of mounting debt. We have illustrated the detailed dynamics of this process by looking at two case studies: cotton farming in Vidarbha, Maharashtra, and coffee & spice farming in Wayanad, Kerala.

It is deplorable that the Central and State governments in the country have done little in terms of adopting and enforcing concrete policies to address this unprecedented situation. Even as, year after year, desperate farmers protest the neoliberal dispensation by turning their fury inward and taking their lives, politicians, bureaucrats and policy-makers look the other way. If 253000 suicides were not enough to wake up our cynical rulers, what will?

Footnotes

1. http://www.hindustantimes.com/India-news/NewDelhi/India-sees-fresh-wave-of-farmer-suicides/Article1-778748.aspx

2. http://ncrb.nic.in/

3. “MAHYCO packet available at Rs.1600/- per packet is with a very high royalty. The issue has already been taken up by Monopoly & Restrictive Trade Practices Commission (MRTPC) and recently it is learnt from newspapers that they have ordered that MAHYCO prices should be equivalent to the prices currently prevailing in China. It is learnt that Monsanto have moved the Supreme Court to obtain relief from this order. In comparison, seed packets of 450 gms are available in Gujarat at Rs 450/- to Rs 500/- per packet as what is in use is Navbharat, a locally developed strain.” (GOI, 2006)

REFERENCES
Government of India (GOI). Report of Fact Finding Team on Vidarbha. Planning Commission, Government of India, 30th May, 2006.

Government of India (GOI). Report of the Expert Group on Agricultural Indebtedness. Ministry of Finance, Government of India, July, 2007.

Mishra, Srijit (2006a): “Suicide Mortality Rates across States of India, 1975 – 2001: A Statistical Note,” Economic and Political Weekly, 41 (16).

— (2006b): “Farmers’ Suicide in Maharashtra,” Economic and Political Weekly, 41(16).

Sainath, P. (various years). News paper reports by P. Sainath on the Vidarbha and Wayanad farm crises are incisive. They are available at http://www.indiatogether.org/opinions/psainath/