End of Distress


Indian Express, July 1, 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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