By Pradeep Baisakh
17 June, 2011
Countercurrents.org
Devinder Sharma, Journalist, Food Policy Analyst and an activist speaks to Pradeep Baisakh on the issue of farmers' suicide, role of Micro Finance Institutions, water conflict between industry and agriculture sector, with special focus on Odisha.
Q: Odisha is not much known for farmers' suicide the way we hear it in Vidarbha, Andhra Pradesh etc. But of late such cases are being reported in the media. What's the reason?
A: When you look at the issue of farmers' suicide, it's an indication of the crisis that exists in the agriculture sector. This is linked to monoculture and intensive or industrial farming model that have been implemented in the country. Vidharbha for instance has been in the news on the issue of farmers' suicide mainly because there is one NGO namely Vidharbha Jan Andolan Samiti which regularly compiles the figures of farmers suicide and feeds to the media. Unfortunately there are no such NGOs elsewhere to do a similar job. So therefore we do not get the real picture of farmers distress in other areas where conditions are equally bad. If suppose this NGO also stops compiling suicide figures, our impression about Vidharbha as a suicide belt of India will also disappear. In other words, not only in Vidharbha, agriculture across the country is in a terrible crisis.
The primary cause of farm suicide is the destruction of natural resources. Due to intensive farming soil has been destroyed and ground water has plummeted. Inputs like use of fertiliser and pesticides have destroyed the environment. Unwanted technologies have added to the woes. The input cost e.g. the cost of the seeds, fertilisers and pesticides have gone up whereas the output cost has remained same more or less in the last twenty years. If you adjust for inflation, output prices have remained more or less frozen. So what do you expect the farmer to do? Those who collapse under agrarian distress, commit suicide.
In Odisha the suicide rates are not as high as in Maharastra or Punjab. That's because Odisha still follows sustainable farming and has yet to completely switch over to intensive farming.
Odisha has yet not adopted the ‘intensive farming' model that the green revolution areas are plagued with. The lessons here is very clear. If you want the farmers to suffer push them into intensive farming. I find Odisha is now at the crossroads. It is under pressure from agribusiness to go in for industrial farming. It has therefore to decide what path -- sustainable or unsustainable -- it wants to pick up for its farmers.
Q: Can you explain what intensive or industrial farming model is?
A: Soil comprises of organic matter. The effort should be on how to ensure that the organic matter is released to plants in a sustainable manner. Under the industrial farming model, the use of chemical fertilisers, pesticides and hybrid seeds are promoted in an intensive way. Over the years, chemical fertilisers upsets the equilibrium of micro-organism in the soil. The organic matter in the soil should be at least 2%. If it is 4% content, nothing like it. Now look at Punjab, where the organic matter in the soil has come down to a low of 0.1-0.2%. In other words due to excessive use of chemical fertilisers, organic matter in the soils is almost zero. Under such conditions, crop production is dependent upon how much chemical fertilisers you use. It is primarily for the lack of organic matter in soil that farmers are now applying twice the quantity of fertilisers that they used to apply some 10 years ago for getting the same harvest. What is not being realised is that he soil is gasping for breath. The desperate need of the hour is to regenerate the soil.
Similarly, the use and abuse of chemical pesticides have played havoc with the environment and food chain. All this has been necessiated because we developed high-yielding crop varieties and hybrids that were responsive to chemical fertilisers and pesticides.
These crop varieties are also water guzzlers. A high-yielding variety (HYV) of rice, for example, consumes on an average 5000 liters of water to produce 1 kg of grain. For the hybrid varieties, the water requirement is as high as 7000 to 7500 litres for producing 1 kg of rice. Hybrid seeds have hybrid vigour and therefore its seed have to be purchased afesh every year. This means more cost for the farmer. In any case, till now hybrid rice occupied about 3% area under cultivation. Now the government is aggressively pushing the use of hybrid seeds under Rashtriya Krishi VikasYojana. As a result we will see water mining literally sucking the groundwater levels dry. Any shrtfall in rain will turn into a severe drought-like conditions because the groundwater levels will fall drastically because of hybrid seeds promotion.
Q: In many cases of farmer's suicides there appears to be a linkage with small loans taken from Micro-Finance Institutions (MFIs). Are MFIs also responsible for agrarian distress?
A: There is no denying that micro-finance is a killer. It looks very attractive under the garb of disbursing small credit at a cheaper rate to build the capacity of the poor and thereby alleviate poverty. In reality, it does the opposite. I fail to understand how can poverty be banished when the poor are given small loans upto Rs 10,000 on an exorbitant annual interest rate of 24%, which in reality turns out to be as high as 48% on weekly recovery. If you and me were to be also charged a usurping interest of 24 % we would surely slide into poverty. Micro-finance is therefore nothing short of a crime against humanity.
In the cities, we can buy a car on a loan at an interest averaging 6-7%. House loans upto Rs 20 lakh are available at 8 % interest. Why should then the poorest of the poor be charged 24 % for a paltry amount? This is nothing but crime. And now look at the MFI hypocrisy. They have gone to the Reserve Bank of India pleading for an extension of their repayment pariod for loans to 5-6 years. MFIs expect the poorest of the poor to repay at weekly intervals but when it comes to them, they are seeking a repayment period of 5-6 years. Isn't this double standards? I have no hasitation in saying that the MFIs bosses need to be held accountable for the crime they continue to inflict on the poor.
Often MFIs respond by saying they have empowered the poor with micro-finance. This is a cruel joke. As I said earlier, if anyone like you and me were to repay back our loans at an interest rate of 24% with weekly instalments, we too would remain perpetually in poverty. The stories that some women have succeeded with MFIs loans is not only unconvincing but are more often than not simply cooked up. As the private money lenders (who charge still higher rate of interests) and they too will tell you stories of several poor who turned the tables with their loans. So if the MFIs brand the private money lenders as criminals, I see no reason why they too need to be seen as anything different. MFIs are nothing but organised money lenders.
Q: People also are taking multiple credit?
A: The repayment cycle is so designed that poor have no choice but to take multiple credit thereby falling in multiple trap. When the poor women cannot repay at weekly intervals they come under so much of peer pressure that they are left with no other option but to commit suicide. Most of the poor in the rural areas are either small farmers or landless labourers. It is therefore obvious that farmer suicide has a direct correlation with the functioning of MFIs.
Let me illustrate. If a poor woman in West Bengal wants to buy a goat she gets a loan from an MFI at 24%. On the other hand, the previous government had made available credit to Tatas for setting up its manufacturing facility for Nano car at an interest of 1%. isn't this ironical? If the poor woean was also to be given a small loan at 1% interest I bet she would be driving a Nano car at the end of the year.
Q: In many cases, relatives of the victims of farmer suicides allege that coercive methods are used by MFIs to recover loan thereby creating a desperate situation wherein the borrower is forced to commit suicide. Has the government done enough on this issue?
A: This is true. Recently, primarily for this reason Andhra Pradesh had brought in a law to regulate MFIs. I am told the Centre is brining in another law which will over-ride the AP law. It is therefore obvious no lessons have been learnt. The Centre appears keen to protect the erring MFIs. This probably follows from the global euphoria in recent years in favour of the MFIs. Such a feeling emanated after the Nobel Peace prize was given to Mohammed Yunus of Bangladesh. No one ever asked Yunus whether he had ever taken a loan at an interest rate of 24% for himself or for his family. The same is true for the head of Basix and SKS Finance in India. They have never taken a loan for themseleves at 24%.
I fail to understand why the shutter should not be pulled down on MFIs. The RBI can do that. I have always said that if farmers can be given cooperative loans at 3% (some States give at 1%) why the same loan cannot be extended to the SHGs?
Q: Farmers in Western Odisha districts like Balangir and Kalahandi, which are also part of the KBK (Undivided Kalahandi, Balangir and Koraput) region, have started using Bt cotton seed for cotton farming. Is it legal? What will be the impact of the entry of Bt seeds to Odisha agro-market given that it has led to farm crisis elsewhere?
A: I think it does not matter if this is legal or illegal. The governments all over the country are supporting Bt cotton or genetically modified cotton. Under public pressure some of the governments may say something, but basically all of them barring a few exceptions appear sold to the idea of GM crops.
KBK as an area that has been in news for long and for wrong reasons. We all know what has gone wrong with KBK, which otherwise is a naturally well endowed region. Early in 1990s when I visited the area to research for my book, people had started shifting to cash crops. You cannot only blame the seed companies for the shift. My view is the farmers are also responsible for the mess they have created in agriculture. Normally we all blame the government. But somewhere down the line we need to also see where the farmer is at fault. If in the last fifteen years more then 2.5 lakh farmers have committed suicide much of the blame also rests with farmers. They have gone equally greedy and wanted to be rich overnight and did all the wrong things. They complain that they have been taken for a ride while purchasing a particular type of seed, this is not believable. I think as a community they must come together to understand what has gone wrong. Look at the farmers union. Are any of them taking the issue of farmers' suicide seriously?
In KBK region also farmers have tried to be rich overnight. There is always a government pressure through various ‘Kisan Melas' to adopt a particular model of farming or promoting a particular brand of seed. But the farmer should know what seed they are using and what would its effect be.
There is one farmer Subhash Sharma in Vidharbha region who owns 16 acres of land. He grows organic crops for the domestic market; does not use any chemical fertilisers or pesticides and still makes good profit. To his 50-odd workers, he gives them an annual bonus and also provides them leave travel concession with 50 days holidays every year. If one farmer can do this, why can't others? Still more importantly, Subhash Sharma farms in the heart of the suicide belt of Vidharbha. This only shows that there still is hope provided the farmers learn to apply the right kind of farming techniques and approaches.
Q: Is the water conflict between industry and agriculture real? Or do we have sufficient water resources to afford for both the sectors?
A: Water conflict is now all pervasive. In Gujrat, Andhara Pradesh, Punjab conflict is being witnessed around the contentious issue of water distribution. Odisha is also going to be major problematic area because the influx of private companies will divert a lot of water being used by the communities. Most of the companies which originate in other Asian countries are coming here for water. For example, POSCO (A South Korean steel giant which is going to make huge investment in Odisha) originates from South Korea which is faced with a terrible water crisis. Crisis there is so precarious that here is one country (there may be other countries) which actually erected underground dams for preserving and conserving groundwater. Steel manufacturing process is one of the worst water consuming. Therefore if Korea permits companies like POSCO to guzzle water then there will be little water left for domestic use. Therefore Korea is allowing steel and car manufacturers (car production tops the list as far as water consumption is concerned) to set up plants outside the country. But in our quest for more FDI we allow these companies to set in. We are simply ignoring the environmental cost. By the time we realise it, it will be too late.
The author is a freelance journalist based in Bhubaneswar . He can be contaced through e mail: 2006pradeep@gmail.com
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