Farmer Suicides in India: Part 2

February 14, 2012

Sanhati Collective

This is a follow-up to our article on farmer suicides in India, Sanhati Journal, January 2012. We thought it would increase the clarity of the argument in the original article if we made some remarks on the following three issues: (1) Farmer suicides in comparison to state population, (2) Stagnation in the growth of yield, and (3) Imports of subsidized cotton and low prices.

At the end of the article, we also include files which contain data on farmer suicides, compiled by us from the NCRB website. This is done for the convenience of other activists, researchers, and journalists, to provide easy access to this data.

FARMER SUICIDES IN COMPARISON TO STATE POPULATION

In Section 2 of the article, we had presented the number of suicides across Indian states between 1995 and 2010. While the absolute number of farmer suicides is important by itself, it is equally important to compare the number of suicides to the population of the states. This latter number refers to the suicide rate across states and gives an idea of the intensity of the phenomenon of suicides.

Figure 3 plots the farmer suicide rate, per 10 lakh population, among the top 8 states that had been reported in Figure 2 of the article (for the years 1995-2010). Three points need to noted about the construction of Figure 3. First, using state population figures from the Censuses in 1991, 2001 and 2011 (provisional totals), we have calculated the interpolated population figures for every state for each year using the compound annual growth rate (CAGR) between the Census years. For instance, the population of Andhra Pradesh was 66508000 in 1991 and 76210000 in 2001. This implies a CAGR of 1.37 percent per year. Using this CAGR, we get the population of Andhra Pradesh for the year 1995 as roughly 70231000. We use this method to arrive at figures for populations in all non-Census years for all the states. To arrive at the farmer suicide rate, we then divide the number of farmer suicide in a year by this population figure. These rates are plotted in Figure 3. Second, farmer suicide rate calculated here is different from the SMR which has been referred to in the original article. Third, unlike Figure 2, we have now disaggregated numbers for Chhattisgarh and Madhya Pradesh separately, so that we report the farmer suicide rates for 9 and instead of 8 states. Let us now turn to the trends visible in Figure 3: what does it show?

First, there is a clear outlier in terms of farmer suicide rates, Chhattisgarh, which has witnessed by far the largest farmer suicides per 1000,000 population since 2000, i.e., since the year we have separate data for this state. Before 2010, the lowest rate of farmer suicides for Chhattisgarh was reported in 2003 at 49.12 per 1000,000 population. This figure was higher than what all other states reported for all of the years since 2000 (other than Karnataka and Kerala, both of which reported equally high suicides rates in 2003). Between 2003 and 2009, the farmer suicides rate in Chhattisgarh increased by almost 50 percent. Even after its steep decline in 2010, the farmer suicide rate in Chhattisgarh is higher than all other states. Given that Chhattisgarh has not seen widepsread adoption of commercial crops like cotton, it seems that the farmer suicides in Chhattisgarh are caused purely by high levels of agrarian distress caused by stagnation in production (due, for instance, to mono cropping) and incomes. Or, is there some other set of factors at play? This is an extremely important issues that needs further, preferably field-work based, investigation.

Second, after Chhattisgarh, which has reported by far the highest farmer suicide rate among all Indian states since 2000, there is a group of 5 states with very high suicide rates. These are, in descending order of farmer suicide rates in 2010, Karnataka, Andhra Pradesh, Maharashtra, Kerala and Madhya Pradesh. What is extremely worrisome is that none of these states display any significant downward trend in the farmer suicide rate. Over the last decade, the trend is basically flat, implying that the suicides continue to take their dreadful toll among desperate small and marginal farmers. The only exception, among these 5 states, is Maharashtra, which saw a decline in the farmer suicide rate since 2006. But that is not good news because Maharashtra saw a steady increase in the farmer suicide rate between 1995 and 2006, at which point it reported higher farmer suicide rates than all other states in this group of 5 states. The current decline just brings the farmer suicide rate in Maharashtra close to the rates observed in the other states in this group, still much higher than its reported rate in 1995.

Third, after these 6 “top” states is a group of 3 states with relatively lower farmer suicide rates. These are, in descending order of farmer suicide rates in 2010, West Bengal, Tamil Nadu and Uttar pradesh. It is worth noting that West Bengal figures among the “top” 7 (or 8 ) states even in terms of farmer suicide rates. The fables about a pro-farmer government in West Bengal under the “Left” Front are precisely that: fables. Of course, it seems likely that things will get even worse under the new TMC-led government.

fsuicidefig1.jpg

Figure 3: Farmer Suicides per 1000,000 population

STAGNATION OF YIELD GROWTH AND CRISIS

Our analysis in the original article asserted, in Section 4.1, that there was general stagnation in yield (output per unit area) in Indian agriculture under the neoliberal regime. There was a small slip: what we had meant was stagnation in the growth of yield and not stagnation in yield itself. While this fact is well known among Indian economists, for the sake of completeness, let us present some evidence for our readers.

Data in Chapter 8 of THE ECONOMIC SURVEY OF INDIA, 2010-11 (http://indiabudget.nic.in/) shows that compound annual growth rate (CAGR) of yield for total food production between 1980-81 and 1989-90 was 2.74%; between 2000-01 and 2009-10, the corresponding figure was a tad higher at 2.94%. But if we probe deeper, there is an interesting pattern.

Among food, two crops – rice and wheat – constituted 78 percent of total production in 2009-10; coarse cereals constituted 15 percent of food production. CAGR of rice yield fell from 3.19 to 1.61 percent; CAGR of wheat yield fell from 3.10 to 0.68 percent over those two periods. Another source that we used was the article “Economic Liberalisation and Indian Agriculture: A Statewise Analysis,” December 26, 2009, Economic and Political Weekly (by G S Bhalla, and Gurmail Singh), which estimates that the annual growth of crop yield went down from 3.17 percent in the 1980s to 1.52 in the 1990s. This evidence is what, we think, justifies our assertion that growth in yields in agricultural production have stagnated in general under neoliberalism.

It is true that during this period, the crop that witnessed the most rapid growth in yield was cotton (ECONOMIC SURVEY, 2010-11). But, ironically, this crop is also the one that led to the largest number of farmer suicides. As we have explained in detail through the case study of Vidarbha in the original article, the growth in cotton yield was not beneficial for most small and marginal farmers, except possibly for a brief period. Let us make a few more comments on this matter.

First, lot of the increased yield in cotton was the result of increased and more expensive input use, i.e., the same area of land produced more cotton but only because the farmer had to buy more expensive seeds, use more fertilizer, pesticide, power (for water), etc. The use of expensive inputs required taking on large amounts of debt.

Second, because the income flows of most farmers was small, taking on the debt meant that the small farmer had to now bear substantially higher risk in carrying out cotton production. In the absence of supporting institutional arrangements, these risks could be crushing, as became clear within a few years.

Third, it seems that the price of cotton did not rise to justify the increased costs of production. Here, two factors seem important. (a) Quantitative restrictions on imports were removed, and import tariffs were drastically reduced: “Domestic policies in India have led to removal of quantitative restrictions and subsequently the reduction of import tariff from 35 per cent in 2001-02 to 5 per cent in 2002-03.” (Mishra, 2006b). (b) The minimum support price (MSP) was not increased significantly (refer to Table 7 in the original article). Both these factors contributed to keeping the margin on cotton production low for small and marginal farmers. As the article shows, the MSP was below the cost of production (according to CACP figures) in 2004-05. So, even if the small or marginal farmer managed to sell all her/his crop to the procurement agencies, she/he would still make a loss!

What certainly worsened matters is the operation of local cartels of trader-cum-moneylenders which operate in situations of interlinked markets. The existence of interlinked markets mean that the small and marginal farmers are, even in the best of times, able to sell to the State procurement agencies with lot of difficulties (if at all). In Punjab, the ignominious “arhatiyas” regularly force small and marginal farmers to sell to them at below MSP. We think that the same scenario must have prevailed in Vidarbha as well. All in all, the small and marginal farmers never really got very high prices for the crop (even when the high yielding, more expensive Bt. variety was used) and so never managed to earn high enough returns to pay off the debt that she had contracted to start off the whole process.

IMPORTS OF SUBSIDIZED COTTON AND LOW PRICES

Changes in trade policies like lifting of quantitative restrictions and reduction of tariffs was an important factor that triggered and exacerbated the crisis. What is the evidence for this?

If we look at the data (http://cotcorp.gov.in/statistics.aspx?pageid=4#cotton1) we see that imports declined from 2002-03 onwards. Does this mean that the imports of subsidized cotton from the international market had no role to play? We do not think so, and for the following reasons.

First, the import figures for the years around 2001 were high, especially in comparison to exports. Imports were low prior to 1999-2000 (refer to Table 9, GOI, 2006). Hence, it is possible that the drop in price due to excess supply (because of high import over export) triggered the crisis. And once farmers had got into the crisis and got indebted as a consequence, it became difficult for them to get out. We cite three articles to support this claim.

(1) A news paper report from Vidarbha:

“It was lifting of quantitative restrictions in 2004 for free cotton import by the NDA Govt. which allowed dumping of cheapest 20 million cotton bales resulting in economic recession and start of cotton farmers’ suicide spiral in Vidarbha and now once again it has re-imposed in 2009 when present UPA Govt. introduced …” (Source: http://vidarbhatimes.blogspot.com/2011_07_01_archive.html).

(2) The following article by Jaideep Hardikar also talks of the rising imports by India at the turn of the
century:

“While cotton prices have declined by more than 60 percent since 1995, U.S. subsidies to its barely 25,000 cotton farmers reached 3.9 billion dollars in 2001-02, double the level of subsidies in 1992. Interestingly, the value of subsidies provided by American taxpayers to the cotton barons of Texas and elsewhere in 2001 exceeded the market value of cotton output by 30 per cent. From a share of 18.16% in 1998-99, America’s share in world exports jumped to 38.96 % in 2002-03. Indian cotton imports rose sharply in the same period, crushing the local cultivators.” (Source:

http://www.prembhatiatrust.com/Jaideep.pdf)

(3) P Sainath had this to say on this matter in 2006:

“Does cotton exist in a free market? The State also admits that giant U.S. subsidies to that country’s 20,000 cotton growers is hitting the millions of farmers in this region. Yet the Centre has not seen it fit to raise import duties. Which now stand at just ten per cent. And so India’s cotton imports in seven years leading to 2005 were three times what they were in the preceding 25 years. The U.S. Cotton crop last year was worth around $3.9 billion. But that nation’s handouts to its growers the same year totalled $4.7 billion. Such subsidies have sunk global prices. As a result, says the State Government’s own paper, “imported cotton now sells at Rs.17,000 a bale compared to Rs.19,000 a bale for Indian cotton.” It also points out that in 2001-02, “U.S. raw cotton exports to India more than tripled to over one million bales. And the U.S. share of total Indian imports rose from 20 per cent to 60 per cent.” (Source:

http://www.hindu.com/2006/12/13/stories/2006121303801000.htm)

Therefore, it is beyond doubt that the imports of cheap, subsidized cotton from the US and elsewhere triggered and exacerbated the crisis.

Second, it should be noted that even with declining imports the magnitude of “carry over” has been relatively high since 2004-05 (other than one year: 2007-08) (for details see,
http://cotcorp.gov.in/statistics.aspx?pageid=4#cotton1). Since “carry over”, in a sense, refers to excess supply, i.e., excess of supply over demand, the persistence of a high magnitude of “carry over” would have a depressing effect on open market prices. Probably, this is one of the reasons why even open market prices have not been high.

REFERENCES

Government of India (GOI). Report of Fact Finding Team on Vidarbha. Planning Commission, Government of India, 30th May, 2006.

Government of India (GOI). Report of the Expert Group on Agricultural Indebtedness. Ministry of Finance, Government of India, July, 2007.

Mishra, Srijit (2006a): “Suicide Mortality Rates across States of India, 1975 – 2001: A Statistical Note,” Economic and Political Weekly, 41 (16).

(2006b): “Farmers’ Suicide in Maharashtra,” Economic and Political Weekly, 41(16).

Sainath, P. (various years). News paper reports by P. Sainath on the Vidarbha and Wayanad farm crises are incisive. They are available at http://www.indiatogether.org/opinions/psainath/

Farmer suicide data in ODS format

Farmer suicide data in MS Excel format

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1 Comment »

One Response to “Farmer Suicides in India: Part 2”

  1. Swarna Says:
    June 8th, 2012 at 9:57 am

    a very elaborative and painstaking effort. Nice article!

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