economics

The economics essay below has been submitted to us by a student in order to help you with your studies.

Farmers Suicides in India

The Indian peasantry, the largest surviving body of small farmers in the world, is currently facing an epidemic of suicide. For thousands of years farmers have depended on the earth to sustain their families. Now, in the twenty-first century, their livelihood, prosperity, and the well-being of their families for generations to come are being threatened by globalization and the shift in the linkage of agriculture from the Earth to a few profit-driven multinational corporations. Even though both state and central governments initially tried to sweep the crisis under the carpet, soon it blew up into huge proportions forcing most commentators to see it as a repercussion of the neoliberal policies pursued by the successive governments since 1991.

The Indian economy has entered the above 6.5 per cent growth trajectory in the past year. Growth implies a higher demand for food which must be met with an increase in food production. Though Prime Minister Manmohan Singh hoped for a 4 per cent growth of agriculture, it clocked a growth of only 2.3 per cent last year. This has serious food security implications for the country. While the decline of agriculture as a percentage of GDP is considered a sign of development, it also signifies lopsided development when the number of people employed in agriculture keeps rising. This implies falling individual income of the farm sector in relative terms.

Since 1997, more than 25,000 farmers have committed suicide, many drinking the chemical that was supposed to make their crops more, not less, productive. In the state of Andhra Pradesh alone, 4,500 farmers have committed suicide in the past seven years. This does not include the number of family members of farmers who have also killed themselves. In Maharashtra, 6 out of 35 districts account for 76% suicides. According to official sources, between 2001 and 2006 as many as 5,910 farmers committed suicide in Karnataka, 1,835 in Andhra Pradesh, 981 in Maharashtra and 201 in Kerala. Countrywide, between 1995 and 2003, 9.26 lakh farmers are reported to have committed suicide, according to statistics put out by the home ministry. Government policies like removal of QRs under WTO regime have created havoc and exposed the farmers to the volatility of international market and prices. This situation has helped in strengthening the merchant capital and the traders cum moneylenders have their fortunes in the absence of supportive institutional mechanisms. Linking of the national market with international markets has also increased the price uncertainty particularly in crops like cotton. Policies directed by World Bank and the IMF have significant influence on the individual farmer. Their agriculture model promotes high-tech, mechanized, chemical-dependent farming. It works on the assumption that one size fits all, but in reality, that "size" only favours large and medium farmers. Few peasant farmers have the funds to make the significant investment required by the model, so they go for loans or buy on credit, with annual interest rates reported as high as 80 percent. Blindly aping the World Bank model of agriculture, Karnataka and Andhra had pumped in huge finances to push in an industry-driven agriculture that has not only exacerbated the crisis leading to an environmental catastrophe but also destroyed millions of rural livelihoods.

The genetically engineered (GE) cotton seeds that the government encouraged required 15 percent more overall investment than did non-GE seeds, but the yield benefit was just 5 percent more. BT cotton, the genetically modified variety sold by Monsanto is thrice as expensive as ordinary cotton. But some farmers shell out the extra money because they expect to spend next to nothing on pesticides. BT cotton, after all, is widely believed to be pest-resistant. Now it is resistant to bollworms, but it's not clear it is resistant to other pests.

Excess international supply at a lower price is also because of direct and indirect subsidies leading to dumping by the United States of America (USA). During the period 1998 to2003 Cotton export prices from USA were lower than their cost of production by more than 50 per cent on average and had reached a maximum of 65 per cent in 2002.

Government Failure in Addressing the Root Cause

Government officials have seemed to overlook is that self-reliance is an ideal that cannot be achieved under the Karnataka Land Reforms Act that limits farmers' rights to landholding and leasing. Instead of addressing the root of the problem, the government attributes the cause of farmers’ suicides to peripheral problems such as adultery and alcoholism. Government has set new heights of negligence. Its policies are more in favour of hi-tech industries thus rendering all the resources of the state to these companies, taking huge loans from international institutions and quenching the farmers’ share for their cause. As per the Tenth Plan outlay of the Planning Commission, Andhra Pradesh gets only 6 per cent of the total assistance to agriculture. This is despite the fact that it has around 9 per cent of the total cultivable area of the country. Maharashtra has around 12 per cent of the total cultivable area of the country and it gets only around 8 per cent of the loans disbursed by the banks. Analysts say the spate of suicides points to the complete collapse of cheap and affordable government credit to farmers. The spate of suicides is rooted in the endemic neglect of the farming sector in the state. Lack of irrigation facilities and institutional loans to farmers and their overdependence on money lenders has led to this sorry state of affairs.

The main proportion of the government's outlay on agriculture goes towards subsidies which contribute very little to growth today. They benefit the rich farmers the most, while the marginal ones are living on the fringe. A recent study done by the Govt. of Andhra Pradesh reported that more than 55 percent of the farmers are not getting the Minimum Support Price (MSP). Government has refused paying ex-gratia payments to the families of the victims in states like Karnataka as some reports suggests that providing ex-gratia payments encourages farmers to commit suicide. The government keeps food prices artificially low by imports, administrative means and subsidy, never allowing the farmer his rightful income. Many of the farmers who felt they had no choice but to shift to the intensive attractively marketed GM seeds now face debts caused by unaffordable, spurious inputs such as futile seeds, pesticides, and fertilizers, and dry bore wells. In Andhra Pradesh production costs of paddy, groundnut, and cotton in the state are much higher than those of other states, making its farmers uncompetitive in the national market.

Causes of Crop Failure and Yield losses

Disruption in regular rainfall cycle since 2001, long dry spells, deficient monsoon, single crop in a year and 93 percent of land is rain fed. Yield is limited by rain, but regular rise in cost of input lowered margin of profit. Volatility in market price further lowered returns. The tragedy unfolds from crop failure. Drought, pests, and spurious pesticides are expensive problems that small farmers don't have the means to rectify. In the last seven years, bad seeds, costly pesticide and drought have triggered debt, then suicide for 4,500 farmers in Andhra Pradesh alone. The crop pattern is tilting in favour of commercialization and hence the risk of crop loss increased due to higher proportion of purchased inputs and technology.

Lack of Credit Availability

Farmers are facing a decrease in income share in their regions. In Andhra Pradesh where 18 per cent of bank loans were to go to farmers, their actual share of loans has never exceeded 11 percent. In Vidarbh, only 4.48 lakh farmers (25%) could avail loan from formal financial institutions in 2005-06. Though overall interest rates have dropped in India, banks are hesitant to offer cheap credit to farmers, fearing defaults. Poor financial state of cooperative banks and apathy of nationalised banks to disbursement of crop credit has increased the problem. While banks complain about bad loans that had been given to farmers, they have yet to recover Rs 1 lakh crore from the corporate sector. Conversely, farmers only owe about Rs 15,000 crore. The dearth of credit forces farmers to take loans from rural lenders who charge interest at exorbitant rates (anywhere between 36 and 50%) that would cause the demise of even the largest of corporations.

Other Reasons for Suicides

For many young people there are no adequate employment opportunities outside agriculture. This compels them to remain in the village and somehow improve their income. Traditional subsistence farming not being more income yielding, there is a tendency among young people to shift for commercial farming and hence, many of them are caught into the quagmire of mono crop. There is lack of income from subsidiary occupations and cooperative movement is comparatively weak in the villages. Financial inability to marry adult daughters/sisters and depression due to loss of social and economic status are also prime causes for suicides. In India, where society and family values are given the highest ranks, the mentality is much more pride and respect oriented. Thus, inability to serve the family properly and paying the loans brings in a feeling of guilt and shame which pushes the farmer into the deathly clutches.

Globalization has resulted in migration which has disrupted the basic social structure and thus resulted in tensed, maladjusted and constrained living. The old notion of joint families has disappeared which was vital when it comes to a cooperative occupation like farming. Thus, where in the joint families, the economic, household and social responsibilities psychological burdens were shared but now in single families, the burdens and responsibilities lie much on the head of the family.

The tragedy is that while the farmers have delivered their verdict, the economists and policy makers are not willing to accept it. The nation is not only clueless but does not even want to know how to resurrect agriculture and farming. This is where the politico-economy equations have gone wrong. This is where the Indian democracy has reached superficial heights.

Interventions Required to Counter Suicides

Need to promote watershed management and massively increase the acreage under irrigation. Presently only about 40 per cent of total agricultural land is irrigated. The true indicators of the economic conditions are objective measures such as the sectoral share in GDP, availability of cheap credit, increase in area under irrigation etc. Farmers must be provided with substantial institutional credit and given an alternative in order to extinguish their tendency to fall prey to the convenience of private moneylenders. Methods of organic farming and integrated pest management should be introduced to eliminate dependency on commodities such as chemical fertilisers, pesticides, and GM seeds. Less expensive, lower-risk organic farming methods might offer a solution for the cotton-growing crisis in India. The farmer’s problem is rooted in his exposure to risk, yield as well as price shocks. Insurance schemes may be devised to mitigate these. Excessive use of fertilizer and pesticides and mono-cropping can affect the fertility of land. Appropriate land management techniques should be devised. A very beneficial by-product of efforts to aid farmers will be the renewal of the land's biodiversity. In the selected districts where agriculture is largely rainfall dependent, strategies to increase irrigation potential (particularly, through watershed development), should be devised so as to provide scope to increase value addition. Another alternative is to encourage a judicious mix of organic and inorganic farming. This will also require help in terms of agricultural extension, quality control and marketing. The farmer is exposed to price fluctuations, particularly in cotton, because of global price movements. The Non Governmental Organizations (NGOs) are already involved in facilitating self-help groups (SHGs). The NGOs and local SHGs should be encouraged to act as pressure groups to regulate private moneylenders. There is a demand for credit, but the supply side of rural financial market is not responding due to some constraints. Enabling the formation of an information bureau will help formal institutions to judge credit worthiness of an individual.

Conclusion

All these lacunae need to be effectively dealt with. The problems with the system are deep rooted, and need to be resolved accordingly. Instead of short-term sops, the government needs to resort to long-term measures. It requires policy makers, agricultural scientists, academicians and even the civil society groups to first accept the fundamental flaws that force farmers to the gallows. And then it needs determination - both political and scientific - and there is no reason why farmers’ distress cannot be turned into a scourge of the past. Economic gimmicks like announcing free electricity and enhancing bank credit will otherwise continue to force farmers to take the fatal route by drinking pesticides.

Most importantly, agriculture must return to a "farmers first" policy rather than its current bias towards corporations. It is only when this ideal is achieved that farmers will regain control of their own lives: financially and mentally.


Request Removal

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link below to request removal:

Request the removal of this essay


More from UK Essays