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? #

Moody's is wrong: Reforms is not the solution to raise rural incomes

Ratings agency Moody’s has at least got the first part right. Farm distress is pulling down economic growth. “India’s farm sector expanded only 0.2 per cent in 2014-15, data released by the government in May showed, and thereby depressing rural income growth.”

This is absolutely right. But where Moody’s has gone completely wrong is its effort to link rural slowdown with the slow pace of economic reforms. In a report ‘Inside India’ which is based on a poll conducted by Moody’s global credit research, the rating agency pointed to “sluggish reform momentum”. Harping again and again on “disappointing pace of reforms’’ has therefore become a usual but overused expression, which is turning out to be a nothing but a cliché.  

The problem with creditors (and credit ratings agency are supposed to operate on their behalf) is that they cannot look beyond reforms, which means cutting down on social security in the name of containing fiscal deficit. Such austerity measures have already created a socio-economic upheaval in Europe, and the crisis in Greece emanates from such faulty prescriptions. Even the IMF has reluctantly begun to accept that the ‘trickle down’ theory, the hallmark of global economic reforms, does not work anymore.

“Rural income growth has been struck in the mid-to-low single digits in 2015 to date, well off the 20 per cent plus rates clocked in 2011. Given the rural consumer price inflation came in at 5.5 per cent year-over-year in May, this means that rural wages are actually contracting in real terms,” the Moody’s report said. This certainly is a correct assessment. The lower the rural incomes, the less would be the capacity of the rural people to increase consumption as a result of which the demand for industrial as well as FMCG products decline. The wheels of economy come to a halt when rural wages decline.

Instead of pushing what is generally meant by reforms, what is urgently needed are measures that raise farm incomes to a higher level and at the same time attract more public investments in rural areas. The best way to do so is to raise the minimum support price (MSP) for farmers. The subdued hike in procurement price of rice by a mere Rs 50 per quintal, an increase of 3.67 per cent, is less than the 5.5 per cent rural consumer price inflation that Moody’s report point to. Similarly, the hike in wheat MSP is by Rs 50/quintal, a jump of 3.27 per cent, shows how deliberately farm incomes are being kept low. With such low farm incomes how does Moody’s expect a revival in rural incomes to the levels achieved in 2011? I would have therefore expected Moody’s to make a strong plea for raising the MSP for farm produce. But perhaps I was expecting too much.

This assumes significance in the light of a recent studiy highlighting the mounting rural indebtedness over the years. In his book Rural Credit and Financial Penetration in Punjab, Dr Satish Verma, RBI Professor at the Centre for Research in Rural and Industrial Development (CRRID) in Chandigarh, clearly shown how rural debt has been multiplying. In Punjab, the food bowl, the average cash loan per cultivator household has risen by a whopping 22 times in a decade. In just 10 years, the average debt per farmer has risen from Rs 0.25 lakh to Rs 5.6 lakh.

Incidentally, Punjab, ranks third in the country as far as farm debt is concerned. Chhattisgarh tops the chart with Rs 7.54 lakh, followed by Kerala at Rs 6.48 lakh.

Loading the farmer with more credit would surely help the sale of farm machines and equipment, which would add to the country’s growth, but is no reflection of the extent of agrarian distress that prevails. It is easy to say that “a sustained soft patch or India’s rural economy would weigh on private consumption and non-performing assets in the agriculture sector, a credit negative for the sovereign and banks,” but difficult to spell out an economic gateway from where the indebted farmer can exit. Moody’s reforms (like other rating agencies) have only pushed 600 million farmers deeper and deeper into a vicious cycle of credit, indebtedness and suicides.

Moody’s report also includes highlights from the first annual Moody’s and ICRA Credit Conference held in Mumbai in May. Well, if you invite only the creditors/investors to such conferences you certainly will not get a complete picture. #

* Moody's report is disappointing: Reforms is not the solution to raise rural incomes. ABPLive.in July 2, 2015. 

http://www.abplive.in/author/devindersharma/2015/07/02/article637033.ece/Moody%E2%80%99s-report-is-disappointing-Reforms-is-not-the-solution-to-raise-rural-incomes