The end of distress
Indian Express, 1 July 2006
The Prime Minister's visit to Vidarbha district in Maharashtra to
unveil a relief package to address farmer distress highlights the
importance the problem of farmer suicides has acquired in recent
times. Maharashtra has seen a four fold increase in farmer suicides in
less than ten years. The number has risen from 1,083 in 1995 to 4,147
in 2004. Even though all India data does not indicate the intensity of
the problem, more detailed data reveals that in some districts in the
country there has been a sharp increase in farmer suicides. A two
pronged approach needs to be followed to address the problem. First,
there must be measures that address the specific problems faced by the
region. Second, there must be a change in agricultural policies at a
broader level. While the government may find it easy to dish out
relief packages, the really difficult job is to address wider policy
issues and to divert central government spending on agriculture from
food subsidy to public investment in irrigation and rural
infrastructure. Having addressed the proximate causes, it is to this
that the Prime Minister must now turn if he wants to prevent more
farmers from killing themselves.
Some people like to brush the problem of farmer suicides aside as a
hype by newspapers like the Indian Express and local newspapers who
have highlighted the issue. At first blush it may appear that they are
right. For every hundred urban Indian men who commits a suicide, there
are merely 103 rural Indian men who commit suicide. This figure
relates to data for 2001 from Accidental Deaths and Suicides in India,
an annual publication of the ministry of home affairs from which data
on suicides is available. Anyone looking at this number would not find
a significant change in recent years as suicides among both urban
and rural males have increased. While in 1975 9.7 men in every one
lakh Indian men committed suicide, by 2001 this number had risen to
14.
But such a cursory look at the data is a mistake. To understand the
magnitude of the problem it is more meaningful to look specifically at
the suicide rate for farmers. This number is available from 1995. A
paper by Srijit Mishra on suicide mortality rates shows that while in
1995 in every one lakh farmers 9.7 farmers committed suicide, in a
short span of six years this number had risen to 16.2 by 2001. What is
even more striking is how the suicide mortality rate has risen sharply
in some states. For Andhra Pradesh it has risen from 13.6 to 25.6
over this period. For Karnataka it rose from 33.7 to 44.5 and for
Kerala from 127.6 to 161.8. The ratio for Maharashtra has increased
from 14.7 in 1995 to 44.1 over in 2001 and to a further 57 in 2004.
The problem may not be an all India phenomenon but, clearly, is quite
acute in some states. Indeed, even within these states there are some
divisions where farmer suicides have risen even more sharply. Between
2001 and 2004 the divisions of Amravati and Nagpur witnessed the
highest suicide rates for males at 115.6 and 55.5 respectively. This
data reveals what the All India data hides. That there is no denying
that there are certain pockets of rural India where there has been a
sharp increase in farmer distress.
The question of how to solve the problem is far more complex. It is
not easy to pin point the causes of the suicides. Indebtedness is very
high on the list. 85 percent of the farmers who committed suicide were
highly indebted. Most of these were small and marginal farmers in rain
fed areas that lack canal irrigation. They try to grow cash crops and
need water, seeds, fertilisers, pesticides and credit. A number of
microlevel studies have been done and most of them indicate that the
primary reason for taking the loan was for crop inputs. This is in
contrast to the old India where loans were taken for non-farm purposes
like weddings. In 60 to 70 percent of the cases the loan is taken from
a private money lender. Farmer's hopes often get dashed when despite
boring wells they do not find water, when the harvest is bad, or when
a good harvest results in low prices. Two to three continous years of
distress can push many farmers to suicide.
The above are the proximate causes of suicide. Other than addressing
the immediate causes, the government also has to address the mistakes
in agricultural policies at a much broader level. Productivity in
Indian agriculture has been falling as a consequence of policy
mistakes. While there are a number of measures like the development of
weather derivatives and futures markets, institutional credit and free
movement of agricultural goods that can make a big difference, one of
the crucial constraint lies in the lack of public investment in
agriculture. Since a large chunk of the money spent on agriculture
gets spent on food subsidy which mainly goes directly to surplus
producing cereal farmers in Harayana, Punjab and UP, there is little
scope for the government to spend on investment in irrigation in the
semi arid zones or rain fed areas where distress levels are amongst
the highest today.
The politcal economy of cereal farming has produced enormous
distortions. In 1991 the central government spent a total of Rs 239
crore on capital expenditure in agriculture. It spent a total of Rs
223 crore on plan expenditure on irrigation and flood control. But it
spent Rs 2,450 crore on food subsidy. Over the years the situation
worsened. The expenditure on food subsidy has increased ten fold. On
irrigation and public investment it has barely increased. In 2005 the
central government spent a total of Rs 176 crore on capital
expenditure in agriculture. It spent a total of Rs 458 crore on
irrigation and flood control. But it spent Rs 25,800 crore on food
subsidy.
Irrigation in rain fed areas is left to private initiative. The
government clearly needs to come up with better policies for dry land
agriculture. This cannot be done unless there is a shift away from a
focus on wheat and rice that dominates government spending and
agricultural policies today. But unless this is done the effectiveness
of relief measures for distressed farmers will remain limited.
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