When India gained independence, the country did not have enough food to feed its people, and famines were almost an annual occurance. Govt. of India used to issue ads about how to save food, and Prime Minister Shastri had to appeal to the population to keep fast one day a week to save food (and gave the country the slogan "Jai Jawan, Jai Kisan" back in 1960s).
We have come a long way since then, and are a food-surplus nation. In fact, India is world's 2nd and 5th largest exporter of rice and wheat, repectively, and agriculture exports account for 14-15% of country's exports.
Good news so far, till one looks at two paradoxes of this turnaround of Indian agricultural sector:
1. a third of Indian population still goes hungry to bed everyday, and
2. the Indian agricultural sector is gripped by another kind of epidemic: suicides by farmers.
This post is about the suicide economy which remains invisible (to many) under the prowess of Indian agriculture. The estimates show around 25,000 suicides since 1997 when this phenomenon became visible... but the phenomenon is there - and growing!! (one report mentions that in Andhra Pradesh itself 8-10 farmers commit suicide everyday!!)
So why are Indian farmers committing suicide?
The Indian Farmer is India's category of HIPC (Highly Indebted Poor Countries) - resource-rich debt-ridden poor - a victim of development and economic policies.
Facts of Indebtness:
According to the 59th National Sample Survey Organisation (NSSO) report, which was released in May 2005, 49% of the 90-100mn farmer households in the country are living in debt.
An Indian farmer household has an average debt of Rs 12,585. The Punjab farmer tops the list with Rs 41,576/household, followed by Kerala with Rs 33,907, Haryana Rs 26,007, Andhra Rs 23,965 and Tamil Nadu Rs 23,963.
Half of the indebted farmers belong to five states - UP, Andhra, Maharashtra, West Bengal and Madhya Pradesh.
In terms of relative share, the highest farmer debt - and highest suicide rate - is in the most productive states - 82% households in Andhra Pradesh, 74.5% in Tamil Nadu, 65.4% in Punjab, 61.1% in Karnataka, 54.8% in Maharashtra... i.e., ironically, in India’s Most Historically Productive Regions, e.g., India's "breadbasket" Punjab, "Rice bowls" like Kalahandi, Andhra, or Burdwan, fertile lands like Mandya, Shimoga, Haveri, etc.
The total rural requirement of short-term loans for crops is about Rs 1 lakh crore/year. The financial institutions (banks, Nabard, etc.) however, supply only 12-14 per cent of this requirement. The rest comes from the local moneylenders, who charge interest rates as high as 60% (as compared to 14% charged by financial institution)
The financial institutions refuse loans because of the "bad loans". However, "bad loans" are due to the definition: A defaulter, even for natural reasons like crop failure (or failure of GM seeds), never gets another loan. Even Kisan Credit Cards, which have a limit of Rs 5,000 per acre, are not reusable unless the borrower has repaid the first loan in part/full.
However, the banks/financial institutions have yet to recover Rs 1 lakh crore from the corporate sector, while farmers only owe about Rs 15,000 crore.
Farmers are not one homogenous lot. They are divided according to their land holdings: marginal farmers (less than 1 hectare); small farmers (2-4 hectares); medium farmers (4-10 hectares); and, large farmers (more than 10 hectares)
Small and marginal farmers make up about 60% of Indian farmers. An average holding in India is just about 1.4 ha in size, and only 15 per cent of farmers can be called large. According to a 2004 RBI study, it is the small and marginal farmers who are most deprived of loans.
...So why are Indian Farmers indebted?
The decline in agriculture started during 1980's, with the decline of public investment in the sector — in irrigation, marketing infrastructure like warehousing, mandis, etc, and seeds and extension services. From 16.4 per cent in 1979-80, plan outlay in agriculture and allied activities slumped to 4.9 per cent in the Ninth Plan (1997-2002), making farming, always the most privatised, independent business, a totally support-less venture in these liberalised, globalised times (the fact that this coincided with the IMF loan is a different story)
Meanwhile, the global prices have dropped: from $216/ton in 1995 to $133/ton in 2001 for wheat, $98.2/ton in 1995 to $49.1/ton in 2001 for cotton, $273/ton in 1995 to $178/ton for soyabean, etc.
The drop in global prices is not because of increased productivity, efficiency and competitiveness of other developed economies, but due to the agricultural subsidies doled out by the rich nations to their agribusiness corporations (e.g., Monsanto, Cargill, Syngenta, etc.).
For instance, the U.S government pays $193/ton to US Soya farmers; 25000 cotton producers in the U.S are given a subsidy of $4bn annually, etc., leading to a subsidy of $ 230 per acre in the USA. In the process, the Indian peasants are loosing $ 26 billion or Rs.1.2 trillion annually. This is a burden their poverty does not allow them to bear. Hence the epidemic of farmer suicides.
More to come...
...this month (August,2005), Govt of India has tabled the Seed Bill, which proposes compulsory registration of "all kinds and varieties of seeds." It disallows the farmer to use his saved seeds to grow crops, unless he pays for it.
Even though farmers use 80% of farm-saved seeds,and farm-saved seeds are exchanged freely amongst them, under the new Bill, the the seeds exchanged among farmers will be treated as "misbranded"... i.e., no farmer can grow or organise production of seeds unless he is registered, and the seed inspector can take samples of any seed or any kind or variety.
...well, next time, when we take a morsel of Roti or a spoonfull of rice, at least we can pay homage to these suicide bombers of our globalized economy!!!
Sources:
A Harvest of Misery
Suicide Spree in India's Farms
The Suicide Economy of Corporate Globalisation
Seeds of Ruin
India's Agrarian Suicide
Farmers and NGOs Oppose Seed Bill
1 comment:
Good article Madhukar. The problem lies in how we deal with the problems. We have the statistics , we know the problem, but none of us are aware how we resolve it and move ahead. Definitely the corporate sector owes more than what the farmers owe the govt. But how often have we seen corporate houses asking to waive off the debt or waive of the interest on loan. I doubt if its the unwillingness of the banks to give loans, it is the commitment from the farmers that may be the problem.
An idea the struck me was. What if the farmers form an association that will act like a company. Its a mix of services and goods industry. The farmers are the machines ( sorry to use the word ) who manufacture grains ,vegetables etc. And company takes the responsibilty of maintaining quality of seeds and manure that is being used. Its like the story of break sticks one by one or in lots. Now the farmers are fighting inidividually, now they need to form unions which will fight for things right fully and for right things and not to waive off loans.
would like to hear your view on this. mail me on raghu@mafoi.com
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