Farmer suicides slip in and out of our collective consciousness. Every once in a while, news of farmer suicides cause minor outrages among the urban middle class. These become election issues, speeches are given over government policies. Occasional eyewash measures are announced. Very soon everything is forgotten and the policies become worse for the farmers irrespective of who comes to power. The farmers’ protests of 2020-21 managed to hold our attention for a longer time and temporarily succeeded in holding back new laws which would have destroyed the rural economy further. However, the people who depend on agriculture as livelihood are staring into an endless abyss with no hope in sight.
Although official records indicate that at least one farmer dies by suicide every hour in India, this is a gross underestimation. Some of this underestimation might be due to the difficulty in data collection in rural areas, but a lot of this is a wilful attempt by the state to hide the extent of the problem. For example, only people who have titles or tenancy deeds are officially considered to be farmers, who are a very small percentage of the actual farmers. Suicides of agricultural labourers and other people who depend on agriculture are not counted as farmer suicides. Even in the case of official farmer suicides, there is an effort to put the blame on other issues like family disputes, alcoholism, or gambling addiction. There is no attempt to understand the main reason why tens of thousands of farmers take this extreme step every year.
Since farming is heavily dependent on weather, the livelihood and incomes of farmers have always been uncertain even in developed countries. In India, the lack of credit facilities and crop insurance makes it even worse. The occurrences of farmers falling into a debt trap due to something like one untimely storm has been common for ages. However the situation has worsened in the last few decades due to India embracing the policies of Liberalization, Privatization, Globalization (LPG) imposed by IMF-World Bank and subsequently by the World Trade Organization (WTO). Let us briefly look at some of the economic causes which are responsible. Some of these issues already existed in pre-liberalization India but the LPG policies have pushed the people who depend on agriculture to the brink of a precipice.
Increasing Costs
Before the LPG era, seeds were provided at very low cost to farmers all over the country by government agencies. The prices and the quality of the seeds sold were strictly regulated. LPG policies led to the closure of public sector seed production units, removed all regulations on quality and prices of seeds and allowed the entry of multinational companies (MNCs) into the seed market. Since WTO dictates that there can be no control over prices or any check on quality, the cost of seeds increased drastically (in some cases like cotton, by 1000% in 10 years) but the quality of seeds are very poor. Fertilizers and pesticides were produced by Public Sector Units (PSUs) and sold to the farmers at subsidized rates. However, IMF explicitly ordered the removal of such subsidies and the privatization of the PSUs. The seeds sold by the MNCs require more fertilizers and pesticides which are now sold by the MNCs themselves at high prices. Subsidies on electricity provided to farmers to run water pumps were greatly reduced. Moreover, recently as electricity production and distribution have been privatized, the costs have increased even more. Government investment in rural development projects like building and maintenance of irrigation facilities, building roads to transport crops to wholesale markets have been curtailed as a part of IMF dictated policy leaving the farmers more vulnerable to weather fluctuations and to middlemen. Cold storage for storing crops after harvesting were privatized increasing the costs further.
Reduced Profit
As a part of the neoliberal economic policy, the government systematically dismantled the Public Distribution System (PDS). The PDS or ration shops used to provide a basic level of food security to a large portion of the population. To stock the ration shops, the government used to procure a large portion of the cultivated food grains thereby ensuring a basic level of income to the farmers. Liberalization opened the doors to private companies and MNCs to procure crops from the farmers directly. It was touted that more competition will ensure better prices for farmers. In practice, it signed the death warrant for thousands of farmers. Due to the destruction of the PDS, the government does not need to procure too much of the food grains. Moreover WTO rules put a limit on how much Minimum Support Price (i.e. minimum amount the farmer is guaranteed to receive) the government can offer. Private companies know that desperate farmers will obviously accept very low prices to reduce their losses. The bargaining power of the farmers is further reduced because the cold storages to store the harvest are privatized and hence are very expensive. The farmers are forced to sell their produce at prices which offer them minimal or no profit. The wonders of globalization makes it possible that the price of wheat in India is decided by the future market of the New York Stock Exchange two years before the crop is even sown. The unregulated import of agricultural produce imposed by WTO, further drives down the prices of not only crops but also fruits and vegetables.
Interestingly, agriculture in the developed countries is highly subsidized which is allowed under WTO rules because they are the ones who wrote the rules. For example, in the USA electricity and petrol are highly subsidized for everybody, not specifically for farmers and hence the imported products are often cheaper and Indian farmers cannot compete with them.
Some farmers, who try to break this cycle of growing food grains for very little profit, are lured by the MNCs to grow cash crops like cotton, pepper, potato, tomato, etc. for an agreed upon price. These crops have a higher cost of cultivation because the seeds cost more and they typically need more water and more specialized fertilizers. However when the time comes to pay, the companies offer a price much lower than the previously agreed upon one. Since there are no restrictions on the import of agricultural products, selling these crops in the open market would be even less profitable. Faced with the choice of an expensive court battle with an MNC with deep pockets while their crops rot, or selling it at a lower price, obviously farmers choose the latter. In addition, since they chose to grow cash crops, they have to buy food grains to survive. In fact, a majority of farmer suicides are of those who cultivate cash crops.
Lack of financial support
Indian farmers, by and large, had always been at the mercy of money lenders due to the lack of government credit facilities. Moreover the LPG policies have basically closed down whatever little financial support the farmers were getting. Again, in the pre-liberalization days, the main role of nationalized banks was to ensure access of credit and debits facilities to people all over the country. Farmers with large landholdings could get loans from banks at low interest rates to buy heavy farm machinery like tractors and harvesters. LPG privatized the banks and now the primary focus of the banks is to earn the highest possible dividends for its shareholders. To ensure that, interest rates on loans were hiked making them unaffordable to farmers.
Earlier there were small rural cooperative banks which helped smaller farmers with the cost of cultivation. Obviously there would be some seasons where these banks would run up a loss because the borrowers would be unable to repay the loans as their crops were destroyed by some extreme weather condition. The government used to temporarily bail out these banks until the next good harvest. IMF termed this as financial mismanagement and prohibited such practices. However, the banks are allowed to give millions in loans to billionaires who already owe the banks millions in unpaid interest rates. Also, deregulation of banking rules has given rise to thousands of predatory micro-finance companies. These companies play the same role that local money-lenders used to play earlier in exploiting the farmers. They offer easy access to capital with very high interest rates and wait for the market forces described above to push the farmers to default on their loans. Then they take over whatever assets and lands the farmers had. The debt trap which was looked at as an evil in economic theory is now an officially sanctioned policy of the IMF-World Bank. Debt is the most common reason behind farmer suicides. Very often the farmers are pushed to alcoholism or gambling addiction due to the hopelessness of their situation. Very often farmer suicides attributed to these causes are actually caused by the burden of debt on them. The crop insurance schemes announced with great fanfare by the current government are a sham. Mostly the insurance payout does not even cover the cost of the seeds.
Global Warming
With the rise in global warming, the weather patterns are changing and have become more uncertain. There are already more instances of extreme weather conditions and it is expected that these will become more frequent in the near future. Obviously this makes agriculture an even riskier proposition. The root cause behind global warming is increase in industrial activity and consumption, the very ideas promoted by neoliberal economics. As long as our world is run based on these policies, there is very little chance of reversing the rise in global warming. The people on the edge are continuously being pushed towards the abyss. The increase in suicides among the farmers and agricultural workers are a manifestation of that.
About 60% of India’s population depends on agriculture for their survival but the share of agriculture in the GDP is less than 20%. The bleak future in agriculture is forcing the younger generation to migrate to the cities. A job as a security guard or a house help is seen as more profitable than farming. So when private capital acquires prime agricultural land to build a cement factory or a golf course or an airport at very low cost, the protests are muted. The left slogan of ‘Land to the Tillers’ have lost their appeal because the tillers do not feel that they can support themselves even if they own the land. We need to spread the understanding of the root causes among the agricultural workers and farmers. Only then along with protests against specific laws, a broad resistance against the entire economic policy and the people who prop them up will develop.
(Author is Associate Professor in Physics at BITS Goa)
