Making Sure Your Jewelry Is Insured

If you were recently married or you're busy making plans for what will be one of the most memorable days of your life, there might be one important action that many people forget yet it's vitally important. Studies show that one third of all brides will lose their wedding ring at some point, and since the wedding ring is one of the most valuable pieces of jewelry most people own, insuring it should be on the pre-wedding to-do list.
Even if it's not wedding-related, if you have jewelry that is valuable, it's important to have it insured, and your homeowners insurance policy may not be enough.

Who Insures Jewelry?

The first place to call for jewelry insurance is the company holding your homeowners or renters insurance policy. Often, there is a maximum amount of loss that will be covered through your homeowners policy. Some may go as high as $7,500 while others may offer no protection. One popular insurance company says that most policies cover between $500 and $2,000, but only if the item is stolen.

For jewelry more valuable than the maximum limit provided by the homeowners or renters policy, purchase a policy rider that specifically covers the loss of the item. Most insurance companies require a current appraisal before they will insure the item and quotes can vary widely. The first place to get a quote is the company holding the homeowners or rental policy. After that, get at least two more quotes. Go to your insurance agent who will contact more than one company on your behalf.

There are other insurance companies that offer specialized jewelry insurance. These may include policies that insure the item for more than its current full value so any appreciation in value is fully covered. Other policies may have no deductible and may not ask for regular appraisals that can quickly add up in cost.

If It's Lost

It's your wedding ring. The last thing you want to do is take it off on your honeymoon, but after swimming with the dolphins in some faraway place, you find out why you should have resisted the urge to wear it in to the water. Somehow, you lost the ring in the water. After wishing you would have left it in the hotel safe, you feel some comfort in the fact that your homeowners insurance will cover the ring once you get home. Sadly, most homeowner's policies only cover a stolen ring. A lost ring may fall back on you to replace. To get around this, check with your insurer to see if it's covered, and if it's not, you may need a supplemental policy.

How About Damage?

What if a diamond falls out or the ring slips in to your garbage disposal? Depending on your policy, damage, much like a loss, may or may not be covered. Making assumptions about your policy can be a costly mistake. When you ask about how the policy covers loss, ask about damage as well.

The Bottom Line

Your homeowners insurance might be fine for basic coverage, but for valuable possessions or lost or damaged jewelry, a supplemental policy rider or specialized jewelry insurance from another company may be the best way to protect those items that not only hold financial value, but sentimental value as well.

Let Insurance Be Your Peace of Mind 

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Looking To Insure Your Wedding Ring? Here's How

Shopping for insurance sounds about as exciting as doing your taxes, but when it comes to wedding jewelry – engagement rings and wedding bands – securing sufficient coverage can prove as essential as any other wedding-related task.

In 2014, couples spent an average of $5,855 on engagement rings. Add to that the cost of wedding bands for both the bride and groom and it’s clear that the average $1,500 to $2,500 of jewelry coverage available through renter’s and homeowner's insurance is insufficient for most couples.

ASSESS YOUR EXISTING COVERAGE

While renter’s and homeowner's insurance policies cover the value of items in your home, jewelry included, coverage only goes up to a certain dollar limit, and circumstances like loss and damage are usually not included.

Engagement and wedding rings can be covered more comprehensively with the purchase of a rider or extension to your current policy – also called “scheduling property.” Scheduled personal property goes over and above the typical renter’s or homeowner's policy so that the full value of the designated, high-priced item is covered in the event of a claim.

If you don’t have a renter’s or homeowner's policy, or the coverage through your existing insurance provider is insufficient, you can purchase a separate policy specifically for your rings. Ask your jeweler if the company offers or recommends a certain policy, or shop around to find an insurance broker with jewelry coverage that suits your needs.

READ THE FINE PRINT ON POTENTIAL POLICIES
When it comes to choosing a provider and policy for your ring insurance, the fine print matters. Here’s what to consider:

• Coverage. A good policy should cover all contingencies, from theft to damage to an accidental drop down the garbage disposal. Make special note of anything that isn’t covered.

• Replacement. How will the insurance company replace your rings? Will you have to obtain your replacement rings at a certain jeweler? Will you receive a check as compensation? Will repairs or partial loss be covered? Evaluate the replacement policy against your fiscal and sentimental concerns.

• Assessment of Value. How will the insurance provider assess the value of your ring for reimbursement? Will it use the current appraisal value or will it only consider the price at purchase?

• Documentation Requirements. Note all of the required paperwork for your policy so that should you need to file a claim, everything is readily available. This typically includes receipts, photos and up-to-date appraisals.

Speaking of appraisals…

KNOW THE VALUE OF YOUR RINGS

A professional jewelry appraisal can help you make sure your rings are insured at their proper value. Choose a gemologist-appraiser to verify facts about the ring while also assessing its value. The American Gem Society has a directory of qualified professionals that can be searched by zip code. Appraisal rates range from $50 to $150 an hour. Be sure to ask around for estimates before committing.

COST CONSIDERATIONS

It’s important to compare not just the cost of one insurance provider to another, but also the relative cost to the relative coverage, as both vary greatly from provider to provider and even from policy to policy.

The general rule of thumb for insuring wedding and engagement rings is $1 to $2 for every $100 of value, paid annually. A $5,000 ring, for example, would cost around $50 to $100 per year to insure. If you live in a city where the risk of theft is higher, you can expect to pay a bit more for your coverage. However, you can reduce costs by installing a home security system or by using a safe to keep jewelry protected when it’s not being worn.

In addition, some policies have deductibles, others don’t. Those without deductibles have higher premiums. In the case of a deductible policy, look to see what types of repairs can affect your coverage costs.

After you’ve combed through the policy fine print, assessed the value of your rings and compared relative costs, you should have enough information to choose an insurance policy that meets your needs. Don’t wait too long to secure coverage, though. You’ll want to make sure you’re protected in the event that anything happens in the days after your purchase or receipt of the ring.

ONCE YOU’RE INSURED…
• Keep all insurance-related documents in a safe place. By this point, you should be familiar enough with the details of your policy to know exactly what documentation you need to keep on file – a written appraisal, ring receipts, photos, gem certificates, etc. Also make sure that any policy details you’ve discussed with your insurance agent are included in the paperwork. All promises need written documentation.

• Consider having an appraisal done every two to three years – even if your insurance policy doesn't require regular appraisals – to ensure that your insurance coverage is still adequate. This is particularly important for vintage, antique and/or collectible rings. Values of precious metals and fine jewels change frequently. Bring a copy of your original or most recent appraisal each time so that your appraiser can work from that rather than starting from scratch each time. This can help reduce your costs.

• Make sure your ring fits. It might sound obvious, but getting your ring properly sized can reduce your chances of ever having to file a claim with your insurance company.

THE BOTTOM LINE

If, how and where you decide to insure your wedding rings will depend largely on your specific needs and assessments of value. By doing your due diligence in combing through the fine print of potential policies and comparing true costs and coverage, you can ensure you’ve made a proper assessment in protecting jewelry that has both monetary and emotional value.

See How To Insure Non-Traditional Assets and Making Sure Your Jewelry Is Insured.


Source investopedia

A Quick Guide on How to Insure Jewelry

Some of the most valuable assets in your home may be unprotected.

We're talking about your fine jewelry: your diamond engagement ring, the vintage Rolex Dad left you, the black-pearl necklace you picked up in Tahiti. Sure, you most likely have a comprehensive insurance policy covering your house and furnishings. But homeowners' or renter’s insurance doesn’t automatically mean every item under your roof is insured (if you’re a renter, you know of course that your belongings are not covered by the property owner’s insurance. See 6 Good Reasons To Get Renter's Insurance).

In fact, some policies specifically exclude jewelry and other valuables (musical instruments, artwork and furs among them). Other policies limit coverage to certain types of events and to a defined dollar amount. This level of coverage can be significantly inadequate, especially if you want to replace the sort of item that has substantially appreciated in value since its purchase.

WHAT YOU NEED

What's required, if you have substantial assets of this type, is additional insurance. Known as a rider or, more specifically, a floater (which targets small, moveable items), it takes over when traditional insurance coverage ends, and typically covers the insured item against fire, loss, theft or damage.

Most major insurers do not offer jewelry coverage as a stand-alone product (an underlying property insurance policy is required). But owners of valuables can purchase coverage as an add-on to their existing homeowners' policy. In fact, most of the more well-known insurers require additional handling for high-end valuables.

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Cases in Point

At USAA, for example, a typical homeowners' policy covers jewelry lost to fire or theft, but not to accidental damage or loss. The coverage limit for jewelry is $10,000 (no per-item limit) and is subject to the policy deductible (the amount you’ll have to pay before insurance coverage kicks in). For more jewelry coverage, a separate policy is necessary.

USAA’s Valuable Personal Property policy covers a broad assortment of accidents and incidents. It will, for example, pay for a replacement diamond if the stone falls out of your engagement ring, or for repair if the ring is accidentally broken. And the deductible is $0. This coverage also applies to musical instruments and fine art. No appraisal is necessary for any jewelry items insured for $15,000 or less, though a receipt or proof of ownership is required when making a claim.

Farmers Insurance has a similar approach. In a typical homeowners' policy, for instance, jewelry is covered up to $1,000 per item and $5,000 per incident (theft, fire). Damage due to accidents is not protected. Farmers offers riders to cover valuable items, and the deductible is chosen by the insured (starting at $0). In most cases, Farmers requires a receipt or appraisal for each item being insured.

Geico and Allstate offer comparable options. Standard policies limit personal property coverage to $1,000 to $2,000. Riders or floaters are available to increase the amount of coverage, and to cover loss and damage not covered by the main policy.

What To Ask

When you look around for the best policy, keep these questions in mind to ask the insurer:

How exactly claims are handled: Will you be required to purchase a replacement and then request reimbursement,or will the insurer send a check first?

Is the item's full replacement cost covered and how is that amount determined (especially if the item is antique or custom-made)?

Do coverage limits fluctuate with the price of precious metals or gems?

How often can/should you submit updated appraisals?

What proof of loss or damage will be required?

Which exclusions does the policy have? What types of loss and damage are not covered?

Additional Tips

Before buying your policy – and when making additions to it down the road:

Have your item(s) professionally appraised, to determine their value for insurance purposes.

Take photos of the item(s).

If you have the option, as with the aforementioned Farmers Insurance rider, consider increasing the deductible to lower the insurance premiums.

Once your policy is in place:

Keep all your items' receipts, appraisal paperwork and photos locked away in a safe (but easily accessible) place.

Store items securely when you aren’t wearing them.

Avoid traveling with irreplaceable or extremely valuable jewelry.

The Bottom Line

Most insurance providers offer discounts to customers who purchase multiple policies. If you purchase your home, auto, life and property insurance from a single provider, you are likely to get a better deal overall (see Making Sure Your Jewelry Is Insured).

If you don’t have homeowners' or renter’s insurance, you may be able to purchase stand-alone coverage from a provider that specializes in insuring jewelry. Some jewelers offer such policies, or can recommend a company that does.

Last, but not least: Protecting your property doesn't mean you can't ever wear it. On the contrary, if you insure your valuable pieces, you can use and enjoy them all the more, knowing they're adequately covered. For more information, see Looking To Insure Your Wedding Ring? Here's How.

Source investopedia

Tougher laws needed to regulate food industry

Only a few days back, the US government reached an out of court settlement with British Petroleum (BP) for a 2010 oil spill it had caused in the Gulf of Mexico. The oil major will pay $ 18.7 billion in damages.

Spewing 4 million barrels into the sea, the oil spill had caused 11 deaths and led to a massive destruction of the marine ecosystem. Instead of worrying about how the huge penalties will impact future investments, I remember US President Barack Obama saying soon after the oil spill happened: “Will make BP pay.”

And it did. This is how the world’s only superpower means business. 

While it may be perfectly right to feel outraged at the huge BP oil spill penalties when compared with the paltry compensation package of $ 470 million that Union Carbide was made to pay for the Bhopal gas tragedy, in which some 10,000 people had died, I thought over the past three decades India had learnt the lessons the hard way. The desperation of foreign investments will not be at the cost of human lives, food safety and the environment. After all, there had been heated debates on the questionable role of politicians, judiciary and the industry leaders in ensuring justice to the victims.  

But I was wrong. Following the recall of Nestle’s maggi noodles, Food Processing Minister Harsimrat Kaur Badal has accused the food regulator – Food Safety and Standards Authority of India (FSSAI) – for inculcating an “environment of fear” in food industry. Her ire was obviously aimed at the food safety organization which had imposed a ban on maggi noodles in June. Addressing recently the regional CII office in Chandigarh, and later in a detailed interview with a newspaper, she criticized the spurt in food safety tests which she believes is hampering more investments to come in. Her man argument was that there is no testing protocol for quality check on processed food. She also blamed the return of ‘Inspector Raj’ that is haunting the food industry.

Mrs Badal’s outburst against FSSAI comes at a time when a US study has found sugary drinks responsible for 184,000 deaths globally every year. Considering that the consumption of sugary drinks has multiplied in India over years, and knowing the damming health impacts, including fatalities, it leaves behind, I expected the Food Processing Ministry to launch a massive nationwide campaign to educate people about the dangers of consuming colas, and at the same time directing the manufacturers to ensure that the sugary drinks being sold are completely safe for human health. For instance, the well-known food writer Vir Sanghvi has in a recent tweet asked Pepsico to explain why the beverage company is using Aspartme in sugary drinks in India whereas  completely blacking it out in America?

The Diabetes Foundation and the Centre for Nutrition & Metabolic Research has pointed to the continuous rise in consumption of sugary beverages, including energy drinks. With per capita consumption of sugary drinks rising from 2 lit in 1998 to 11 lit in 2014, these sugary drinks are being blamed for an increasing number of deaths and disabilities.  Considering that Swami Ramdev has been repeatedly warning people against using these sugary drinks claiming that these sodas as good as toilet cleaners, I had expected the Food Processing ministry to be extra vigilant.

The task to ensure processed food is undoubtedly safe becomes more onerous and urgent in the light of the report submitted by the US President’s panel on cancer. It estimates that 41 per cent of Americans living today will suffer cancer in their lifetime. The report warns against the pervasive use of chemicals in processed food – including pesticides, insecticides and synthetic ingredients in the processed food. Fighting cancer therefore requires tougher laws and strict implementation of food laws. If the US food industry was responsive enough, the country wouldn’t have faced a cancer epidemic. But still, the food industry does adhere to the quality standards in US/Europe. Much of the problem in the developed countries is because of lax quality standards in view of the aggressive lobbying by the industry.

Following the maggi noodles ban, the FSSAI has drawn samples from some of the major brands like Hindustan Unilever, Britannia, Nestle India, Heinz India, MTR, Haldiram and others. Quality test of food products for safety certainly warrants urgency considering that food adulteration and contamination has become rampant over the years. With nearly 80,000 food processing companies in operation, including Big Food, and with hardly any quality laboratories to check what goes inside, manufacturers have had a field day so far.

It took 16 months from the day the first maggisample was drawn to the final test report. Woefully lack of adequate testing laboratories all these years has therefore been an easy escape route for the food companies to manage getting Scott free. A Zee Business report showed how 75 per cent companies, whose samples were drawn, escaped being penalized because of gaps in quality testing. In the past five years, only 25 per cent of the 53,406 companies whose samples had failed to conform to quality standards, could be penalized. The penalties of course are too low which does not provide any deterrent.

It is alright to decry ‘Inspector Raj’ but unless the inspectors draw samples regularly how will the food processing industry be made to clean up its act? In China, there exists one food quality laboratory for 0.2 million people. In India, one lab is available for 88 million people. The thrust therefore should be to increase the number of quality testing labs at a phenomenal rate. And I am sure the Chinese labs are not only for decorative purposes but for testing food samples. If the food industry is perfectly comfortable with regular food testing in China why it should cry foul in India?

The need for investment therefore should not be compromised in the name of tougher food safety laws as well as environmental norms. India needs responsive business, and all investments must respect the rights of the people. The food industry must be asked to adhere to the safety laws, and if it is unable to do so, be directed to pull down the shutter. #

Food industry must sticks to safety laws. Hindustan Times. July 16, 2015.

http://www.hindustantimes.com/chandigarh/food-industry-must-stick-to-safety-laws/article1-1369661.aspx

Rural India has to be the pivot of Skill India. Start with farmers

In the midst of all the excitement generated over the launch of an ambitious ‘Skill India’ initiative, I find two news reports to be particularly disturbing. These reports are a reflection of the worsening job scenario, with or without specially acquired ‘skills’.  

In Madhya Pradesh, 362,685 people applied for the jobs of peon/guards in 58 State Government departments. Of these 14,000 were either post-graduates or engineers. They all sat for a written examination. I wonder what kind of special skills are required to be a peon/guard that they need to go through a written test. Anyway, another news report tells us how a Mumbai-based post graduate, with four degrees in hand, including an MA in globalization and labour from the Tata Institute of Social Sciences, is working with the Mumbai Municipal Corporation cleaning the city’s garbage. An MBA was among those who had recently applied for 26 jobs of peons in the Punjab and Haryana High Court in Chandigarh.

While the ‘Skill India’ initiative to provide particular skills to 400 million people by 2020 is certainly welcome, I don’t know whether we already have an over-skilled work force or we have a long way to catch up with some of the developed countries record in providing skills. For instance, if India were to just categorise its 52 per cent farming population as skilled workforce, it will immediately move into the developed country category with over 50 per cent skilled manpower. Farming being a skilled profession, farmers have been deliberately treated as non-skilled workers. Categorising farmers as skilled workforce has financial implications, including ensuring minimum wages, paying health expenses and also providing post retirement benefits. That’s why farmers are kept out.

Similarly, I find one of the biggest employment generating sectors – temples/churches/gurdwaras – to be outside the purview of skilled workforce. Those who join these religious institutions are also skilled, even if they don’t require an ITI diploma.

The definition of what constitutes a ‘skill’ therefore has to change. I see no reason why farmering, which employs 52 per cent of the population, should not be included as part of the skilled workforce. At the same time there is a dire need to launch a skill improvement programme for young farmers with adequate financial and institutional support to enable them to become start-ups and entrepreneurs. There is a much greater possibility to turn the young workforce in rural areas to learn avocations that can make them self-employed. This is specially required considering that nearly 81 per cent of the land holdings are below 2 acres, which means the young members of the small and marginal farm families need to be trained to supplement their income from non-farm activities.

Besides shifting the thrust of public investments to rural areas, what is also required is to provide proper incentives for bringing about a required change. A poor woman in a village who wants to rear a goat for creating a viable livelihood option too needs to be given incentives that are given to big industrial houses. She needs to borrow Rs 8,000 for buying a goat which comes from a Micro-Finance Institute (MFI) charging 24 per cent rate of interest. On the other hand, big industrial houses are often given credit at 0.1 per cent interest. If only the poor woman was to get the loan for buying a goat at 0.1 per cent I am sure she would be driving a Nanocar at the end of two years. Similarly, Farmer Producer Companies, which enables farmers to get into entrepreneurship, have to pay an interest of 30 per cent on the profits generated. Why can’t it be brought down to 15 per cent to begin with? 

Therefore, there is a dire need to change the focus of skill development programme. It cannot be only aimed at meeting the requirement of 30-crore cheap labour -- dhari mazdoors -- that the Confederation of Indian Industry (CII) estimates the construction sector will require by 2022. Only a fraction of the jobs in the construction sector would need the kind of skills that the ITIs are known to train them for. More than 95% jobs in the construction industry are simply of daily wager workers.  Also, an ICRIER study shows that automation and increase in labour productivity destroyed 11.8 million jobs in the manufacturing sector in post reforms period. That’s a warning that cannot be ignored. #

*Rural India has to be the pivot of Skill India: Start with farmers. ABPLive.in July 19, 2015
http://www.abplive.in/author/devindersharma/2015/07/19/article655531.ece/Rural-India-has-to-be-the-pivot-of-Skill-India-Start-with-farmers?fb_ref=Default

Farmers suicide statistics is a reflection of the terrible agrarian crisis that prevails in India

Despite all efforts to paint a rosy picture, the latest compilation of farmer suicide statistics for 2014 by the National Crime Record Bureau clearly brings out the dark underbelly of Indian agriculture. With 12,360 farmer suicides recorded in 2014, it only shows that one farmer commits suicide somewhere in the country every 42 minutes.

Although the NCRB has made a valiant effort to segregate the farm suicides figures into two categories – farmer, and agricultural workers -- to show that farm suicides rate has fallen by 67 per cent, the fact remains that historically farm labourers have been counted as part of the farming category. Adding both the figures – 5,650 farmers and 6,710 agricultural workers – the death toll in agriculture for 2014 comes to 12,360, which is higher by 5 per cent over the 2013 farm suicide figures.

The serial death dance on the farm is a grave reflection of the terrible agrarian crisis that continues in farming for several decades now. While every successive government – both at the centre and in the States – have made tall promises to resurrect agriculture, the swing in farm suicide figures shows the callous and deliberate neglect of a sector that employs 60-crore people. Farmers have been very conveniently used for only two political purposes – as a vote bank and as a land bank.

Not showing any signs of petering off, a renewed spurt in suicides is now been witnessed in Uttar Pradesh, Karnataka, Maharashtra, Punjab and Haryana for the past few months.

In 2014, the NCRB data tells us that a third of the total suicides – 4,004 – took place in Maharashtra, followed by Telengana with 1,347 suicides. Reading between the lines, it becomes apparent that there is a visible effort to downplay the suicide figures by almost all states, including Punjab, the food bowl of the country. This follows a trend that Chhatisgarh started in 2011 when it started showing zero farm suicides. After record zero suicides for 2011, 4 in 2012 and again zero in 2013, Chhattisgarh now shows a sudden jump in farm suicides to 755 in 2014.  

In Punjab, as per NCRB data, only 22 farmers committed suicide in 2014. Add agricultural workers, and the final suicide toll comes to 64. This is a gross under-reporting of the real situation that exists. Panchayat records in just four villages of Sangrur and Mansa districts in Punjab show 607 suicides in past five years, with 29 deaths recorded between November 2014 and April 2015. Similarly, in Maharashtra, the Vidharbha Jan Andolan Samiti has contested the NCRB data. Several gaps in the counting methodology, including difficulty in putting women deaths in the farmer category since the in most cases the land is not in their names has time and again been brought out.

Indebtedness and bankruptcy (22.8 per cent) tops the reasons behind these suicides; followed by family problems (22.3 per cent) and 19 per cent because of farming related issues. Growing indebtedness of course has been considered to be the major reason behind the serial death dance being witnessed on the farm. According to a study conducted by Chandigarh-based Centre for Research in Rural and Industrial Development (CRRID) – the average farm debt has multiplied 22 times in the past decade in Punjab. From 0.25 lakh per household in 2004 it has gone upto Rs 5.6 lakh in 2014. Chhattisgarh tops the chart with an average debt of Rs 7.54 lakh, followed by Kerala with Rs 6.48 lakh household debt.

The total debt that farmers carry in Punjab is almost 50 per cent higher than the State’s GDP from agriculture. At the same time, another study by CRRID shows that 98 per cent of rural families in Punjab are indebted, and the average debt is 96 per cent of the total income a household receives. If this is the situation in Punjab, imagine the plight of farmers elsewhere in the country.

Why farm indebtedness has been steadily on a rise has never been studied beyond find out how much lending is coming from the moneylenders who are known to charge exorbitant interests. While lack of institutional finance is a limitation, it is the declining agricultural income that remains the major reason for growing indebtedness. Let me illustrate with a cost analysis of a typical farmers from Uttar Pradesh. As per the latest estimates of the Commission for Agricultural Costs and Prices (CACP), the net return from cultivating wheat in Uttar Pradesh has been worked out at Rs 10, 758. Since wheat is a 6-month crop, sown in October and harvested in April, the per month income for a farm family comes to Rs 1,793. If this is the level of income of a wheat farmer, I wonder what kind of livelihood security we are talking about when it comes to farmers.

I looked for more details. If the other crop farmer is growing is rice, the average net return for it has been computed at Rs 4,311. Add for rice and wheat, the total that a small farmer from a hectare earns is Rs 15, 669 or Rs 1,306 per month. With such meager incomes I can understand why a large number of farmers commit suicide at regular intervals. Those who are not so courageous either sell-off their body organs or prefer to abandon farming and migrate to the cities looking for a menial job as a dehari mazdoor.

This augurs well with the findings of the socio-economic survey which states that 67-crore people in the rural areas are surviving on less than Rs 33 a day. Several other studies have shown that roughly 58 per cent farmers go to sleep hungry, and close to 62 per cent hold a MNREGA card. Instead of pushing under the carpet the grave agrarian crisis that persists, the NCRB data should actually help the government to formulate policies to reverse the suicide trends. If 1,000 suicides in the armed forces could prompt the Defence Ministry to take a series of steps to ameliorate the situation, I wonder why a human toll of close to 3 lakh farmers taking their own lives in the past 20 years has failed to shake up the successive governments? #

Why are Karnataka farmers being driven to suicides? Just look at their income levels from farming.

When Chief Minister Siddaramaiha pleaded: “I beg farmers; I touch your feet and request you not to commit suicide. We will help you in all ways,” he was not only making a political statement but simply showing his exasperation at an unending serial death dance on the farm.

In what appears to be an unprecedented reflection of the severity of a continuing agrarian crisis, more than 50 farmers (and still counting) have taken their own lives since June. In fact, self-immolation by some farmers, a few of them even jumping in the burning sugarcane fields, is seen as an expression of extreme indignation against the apathetic and farmer-unfriendly agricultural policies of the state. Such has been the pace and spate of suicides that Karnataka has suddenly joined the category of farm suicide hotspots of the country.

Karnataka agriculture has always been on a boil. The bubble had to burst sooner or later.

Ignoring warning signals, successive governments had merrily pursued macro-economic policies wherein agriculture had simply disappeared from the economic radar screen. Repeated crop failures, growing indebtedness, and falling incomes had failed to draw attention to the worsening plight of the silently suffering farming community. While the simmering discontent brewing on the farm was very conveniently brushed under the carpet, Karnataka became a hub for emerging technologies and sophisticated equipments.

That such a pitiable situation should exist in a state which has given the country an idea to integrate the existing APMC markets through a common e-platform, defies economic logic. If establishment of a Rashtriya e-Market Services Private Ltd, a 50:50 joint venture with NCDX Spot Exchange, was helpful indeed I fail to understand why Karnataka farmers are not getting the right price for their produce. Already 55 of the 155 main market yards have been integrated into a single licensing system.

To understand why Karnataka farmers continue to be pushed into the never ending cycle of mounting indebtedness, I tried to take a deeper look to know the economic cost of production and incomes for some major crops. The best detailed cost analysis is provided by the Commission for Agricultural Costs and Prices (CACP) which has a countrywide mechanism to collect, aggregate and analyze agricultural statistics. What is shocking to know is that the net return for many crops is actually in the negative, which means farmers will only end up harvesting losses.

The latest CACP reports for 2014-15 Rabiand Kharif marketing seasons has tabulated gross and net returns based on average of actual costs incurred between 2009 and 2012. Accordingly, the net return from cultivating bajra per hectare is minus Rs 2,669; ragi is minus Rs 9,017; Groundnut minus Rs 843; and for Sunflower it is minus Rs 629. If the farmer is destined to harvest losses, given the low market price available in the absence of an assured procurement structure, I wonder what kind of technological and financial support can bail them out. Giving them more credit, even if it comes from institutional agencies/banks, will push them further into a death trap.

For other crops too, the economics does not look to be attractive enough. Let us first look at sugarcane, a crop for which outstanding cane arrears in Karnataka amount to a staggering Rs 1,300-crore. According to CACP, the net return from cane cultivation in Karnataka is Rs 86, 156 per hectare. This is the highest net income for cane recorded in the country. But sugarcane being a yearly crop, the net return is for a 12 month period, which comes to Rs 7,180 per month. When even this low income is not being paid in time considering the huge cane arrears; the farmer is left with little choice but to end his life. 

In case of cotton, the net income in Karnataka is Rs 14,700 per hectare. For paddy, the net income per hectare has been computed at Rs 10,835; Maize Rs 6,992; jowar Rs 1,604; Tur Rs 9142; for Gram Rs 3,699 and for Safflower Rs 57 only. Cotton is a 6-month crop, which means net income per month is hardly Rs 2,450.  Similarly, net income per month is very low for other crops. These low incomes compare well with the findings of the latest socio-economic survey 2011, which concludes that 67 per cent of the rural population lives on less than Rs 33 a day. The challenge for the state government therefore is to augment farm incomes just like it did for ragi. Providing a higher procurement price of Rs 2,000/quintal (Rs 500 more than the Centre), the state has procured 14 lakh quintals of ragi.

Since the Chief Minister is keen to do everything possible to help farmers, I have two immediate suggestions: 

1. Karnataka should set up a Farmers Income Commission with the mandate to work out a monthly assured income package that a farming family must receive given the geographical location of the farm as well as its production. Farmers are actually carrying the burden of providing cheap food for the population. This has to change. If a chaprasi can get an income of Rs 15,000 per month why a farming family should be made to survive in Rs 3,000 or less in a month?

2. Just like for ragi, the procurement system needs to be expanded for other crops. Karnataka should make investments for setting up APMC markets in 5 kms vicinity of every village. Investments are also required for creating non-farm activities in the rural areas. This means shifting the policy focus to rural investments.   

Farmers deaths: Ire against apathetic, unfriendly agri policy. Deccan Herald, July 21, 2015.

http://www.deccanherald.com/content/490426/farmers-deaths-ire-against-apathetic.html