Farmers' demand for conditional cash transfer scheme is justified

By – P S M Rao

As politicians lend their ears only on the poll eve, those who are working for the cause of people too seek to bring in pressure during that time and try to articulate their demands. A similar exercise is seen in AP from the farmers’ associations and groups working for the betterment of the lives of the farming community.

Almost all the farmers’ unions in the state and some 100 NGOs working in the areas of sustainable agriculture have endorsed a manifesto for the farmers. The Centre for Sustainable Agriculture has articulated their demands in the manifesto, particularly for income support, a cash transfer scheme, to the farmers. The demands are interesting to examine closely not only in the context of the Telugu Desham taking up the proposal of Cash Transfer Scheme but also because they are relevant for the farming community all over India.

To ensure sustainable income and livelihood security, the farmers’ groups are asking for ensuring a minimum income to them through agricultural operations. Towards this end, they want the appointment, by the government, of an Income Commission as a statutory body that would examine the real incomes of the farmers every year and would come out with recommendation to ensure minimum income to support their life.
Income Commission to farmers

MS Swaminathan too is advocating for an arrangement like this. He wants the government to focus its attention in the regular budget for 2009-10 on appointing an Income Commission for farmers. Justifying his claim, Swaminathan argues that the recommendations of the 6th Central Pay Commission, which provide benefit to 4.5 million central government employees and 3.8 million pensioners, were not only accepted but were improved upon by the government. So, he suggests that the major political parties should commit themselves to establishing a Farm Income Commission which can go into the totality of the income of farmers from crop and animal husbandry, fisheries, agro-forestry and agro-processing, and suggest ways of ensuring a minimum take home income to farmers.

Reverting to the AP farmers’ demand, they want the proposed Commission should adopt a multi component approach. The components include: i) Remunerative prices should be fixed for agricultural produce. The pricing for agricultural commodities should be based on the real cost of production, that is through neutralising the effect of inflation. The minimum support price should be 50% more than the actual cost as recommended by the National Farmers’ Commission. The determination of support should be transparent and be announced before the beginning of the crop season. They also want a state-level agricultural costs and prices commission and a price stabilisation fund.
ii) Labour wage support should be provided for agricultural operations. It is ironic that the agricultural workers are unable get employment while the farmers are not able to afford agriculture workers due to increasing costs of living. The government should therefore provide input subsidy in the form of labour wages (up to 100 days in a calendar year) to the farmer to monetise the use of family labour or to pay external labour engaged on the farm in order to support both the farmers and farm labourers. The activities to be supported should include all agricultural operations, from sowing to harvesting. This can be operationalised on similar lines as NREGS, or by suitably increasing the number of days covered under NREGS and extending it to agricultural work.

iii) Steps should be taken to increase rural employment opportunities. This should be done through systematically promoting post-harvest operations and value addition enterprises at the village level; the net income of farmers can thus be directly increased. By promoting agriculture-centred small scale rural industry, the rural economy can be given a big boost, correcting the rural-urban imbalance and migration.
iv) There should be an arrangement for the social security measures like pension and insurance to the farmers and farm labourers.

Cash support to farmers
Finally, and more importantly, arrangement should be made for direct income support to farmers. Even after implementation of measures listed above, farmers are not expected to get living income. The direct cash support is, therefore, necessary. They want this support in the form of a fixed amount per family, given to all cultivators including tenant farmers. This direct cash support, together with other measures, should ensure that every agricultural family can maintain a fair living standard. This could be set at Rs 15,000 per family and revised every year by the Commission.

The farmers want support for sustainable ecological farming to ensure food security and livelihood support on a sustainable basis. Small and marginal farmers in many parts of India have achieved success through low-input sustainable methods which not only helped them but also boosted soil fertility.

Farmers want the government to promote sustainable agriculture to maximise the use of local resources. Farmers adopting organic/ecological farming should also receive financial support from the government for their own input use. They also want restrictions on agrochemicals that are banned the world over and a ban on GM crops till their bio-safety is proven beyond doubt. Also, they want support for research in organic farming, demonstrations by agricultural department on the success of organic farming and strengthening the farmers’ training centres in which the experienced farmers should be used as resource persons.

These demands of the farmers are not at all unreasonable, particularly for the direct cash transfer. This is because they are not asking for the support without working. They want to engage in farming activity and want support only to allow them to be in the profession; in other words they want a conditional cash transfer scheme.

In fact there have been repeated claims in the discourse on agriculture that farming on a small scale is not viable and as much as 50% of the farmers can be withdrawn from the occupation without affecting the total production. That means about 30 crore people are additionally depending on agriculture. Considering this to be true and, as many farmers are willing to come out of agriculture, where are the avenues of employment to them in the non-agricultural activity? If such employment is guaranteed, there is no problem, but it is impossible for the government to do so. It therefore should support the farmers and meet their reasonable demand including the cash support.

Besides this need, the bad state of agriculture in AP also calls for an urgent action to protect the farmers and farming. As many as 16 of the 32 districts identified by the central government as worst affected are in AP. As many as 1797 farmers have committed suicide in 2007 (2607 in 2006) – AP occupies the second place after Maharashtra in farmers’ suicides. Similarly, 82% of the farmers in the state are indebted and 66% to non-institutional sources, as per NSSO data. The input costs of farming have risen by 300% in the past five years and the prices of produce have not kept pace, leading the farmers into a crisis situation.

So, the cash support to 1.2 crore farmers of the state, which is estimated to cost Rs 25,000 crore or 25% of the state’s budget, is quite reasonable and warrants a serious consideration from political parties. In reality, the actual cost may be much less than this estimate because the government is going to save on the schemes of indirect support which are not found beneficial to the farmers. Even otherwise, this cost which should be treated as an essential social cost for the enormous social benefit of supporting the farmers will not be too much. Neglecting agriculture and avoiding timely measures will only lead to a catastrophic situation. After all, it was agriculture, as admitted by the UPA government, that saved India f
rom falling into a deeper economic crisis.

A smarter way to combat hunger

Pedro A. Sanchez1

  1. Pedro A. Sanchez is senior research scholar and director of tropical agriculture at the Earth Institute at Columbia University, 61 Route 9W, Palisades, New York 10964, USA.

Traditional approaches to supplying food are an inefficient ‘band aid’, says Pedro A. Sanchez. New evidence shows that helping farmers to help themselves is more effective and would be six times cheaper.

After decades of progress in the fight to vanquish world hunger, the number of undernourished people is growing again. Estimates from the Food and Agriculture Organization of the United Nations suggest that 963 million people1 in poor countries are chronically or acutely hungry — up 109 million from 2004 estimates2. The underlying causes — changes in food and energy prices3 — have been exacerbated by the financial crisis and obsolete development policies.

Policies should shift from prioritizing food aid to providing poor farmers with access to training, markets and to farm inputs such as fertilizer and improved seed. In addition to being cheaper, such investments allow farmers to grow food to feed themselves, to sell the surplus and to diversify into high-value crops, livestock and tree products. This creates a sustainable exit from the poverty trap, thereby decreasing the requirement for aid. Although marginal populations, or those affected by disasters, will still require assistance, procuring this food from within developing countries provides a cheaper alternative than shipping it from abroad.

A smarter way to combat hunger


The predominant policies to tackle hunger epitomize a ‘band-aid’ approach — quick fixes that fail to address the causes of hunger. In 2006, the United States spent US$1.2 billion in food aid for Africa, but only $60 million on agricultural development there4. The international response has generally been similar. But according to estimates from 2004, only 10% of those who are hungry in poor countries are acutely hungry — those facing famine caused by wars, natural disasters or sheer destitution. The other 90% are chronically hungry, leading to malnutrition that compromises immune systems and contributes to the prevalence of diarrhoea, malaria and other diseases that result in high child mortality2. Most of those who are chronically hungry live in rural farm households in Africa and South Asia.

Food aid fails to provide a sustainable solution to hunger and poverty and it is comparatively expensive. It costs $812 to deliver one tonne of maize as US food aid to a distribution point in Africa5. As part of the Millennium Villages project, which I co-direct, smallholder farmers (those who farm 0.1–5 hectares) in hunger hot spots across Africa were provided with access to fertilizers, improved seed, technical support and markets. As a result, maize yields more than doubled — from 1.7 to 4.1 tonnes per hectare6. And following a national ‘smart’ subsidy programme for fertilizer and hybrid seed in Malawi, average maize yields increased from 0.8 to 2.0 tonnes per hectare in two years7.

The fertilizer and improved seed required to produce an additional tonne of maize grain by Millennium Village farmers cost an average of $135 at April 2008 prices6, six times less than through food aid. Purchasing that same tonne of maize locally — in an African country or a neighbouring one — costs approximately $320 (ref.5). If farmers in Africa raise their average cereal yields to 3 tonnes per hectare, the additional 200 million tonnes grown in the 100 million hectares of smallholder crop land will more than compensate for the 3.2 million tonnes of food aid8.

Although estimates of efficiency vary, they indicate a major leap for development assistance. Shifting 50% of the current US food-aid budget to ‘smart’ subsidies or credit could help millions supply their own food and meet much of the aid demand. Such a move would be budget neutral.

Even buying food locally represents an important step away from the inefficient food-aid approach. Some institutions have already begun to change their methods. In 2007, CARE International, a leading relief organization headquartered in Atlanta, Georgia, announced that it would stop monetizing food aid (selling some of the food to fund their operations), essentially losing $46 million a year. Also in 2007, the World Food Programme procured 43% of the 2 million tonnes of food required for its Africa relief operations from farmers in Africa at an average cost of $280 per tonne — compared with the average cost of $436 for purchases elsewhere9. The new Purchase for Progress programme, launched in September 2008 and funded by the Bill & Melinda Gates Foundation further empowers the World Food Programme to purchase food from African farmers.

Most importantly, the UN secretary general Ban Ki-moon is leading the development of a coordination mechanism for large-scale financial support for poor countries seeking to provide farm investment. The Spanish government has pledged euro dollar1 billion (US$1.3 billion) over five years for this effort, which should begin this year, and the European parliament has promised a similar amount. With more programmes aimed at merging food aid with reliable farming investment, the numbers of those who are chronically hungry should begin to fall.

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  1. Diouf, J. Speech at High-Level Meeting on Food Security for All Madrid, 26–27 January 2009. Available at
  2. Sanchez, P. A. & Swaminathan, M. S. Science 307, 357–359 (2005). | Article | PubMed | ChemPort |
  3. von Braun, J. Nature 456, 701 (2008). | Article | PubMed | ChemPort |
  4. The Chicago Initiative on Global Agricultural Development Renewing American Leadership in the Fight Against Global Hunger and Poverty(Chicago Council on G
    lobal Affairs, 2009). Available at

  5. Garrett, L. A. Food Failures and Futures Maurice R. Greenberg Center for Geoeconomic Studies Working Paper (Council on Foreign Relations, 2008).
  6. Sanchez, P. A., Denning, G. L. & Nziguheba, G. Food Security 1, 37–44 (2009). | Article |
  7. Denning, G. et al. PLoS Biol. 7, e1000023 (2009). | Article |
  9. Jury, A. New Roles for Food Assistance: How Can Food Aid Support Agricultural Growth and Productive Safety Nets in Africa? Presentation at the World Food Prize Symp., 22 October 2008 (World Food Programme,2008).

Where is 'Aam Admi'?

Srijit Misra

‘Business as usual is no longer an option’ has become a catchword with the current financial crisis, but was initially mooted by the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) that presented its synthesis report in April 2008. Despite being a signatory to it, despite the acknowledgement of the larger agrarian crisis that the country has been facing and despite the similarity in purpose envisaged in the ‘inclusive growth’ slogan of the Eleventh Five Year Plan and IAASTD’s emphasis on ‘the reduction of hunger and poverty, the improvement of rural livelihoods and human health, and facilitating equitable, socially, environmentally and economically sustainable development,’ one does not find much mention of it either in the current interim budget of 2009-10 or other recent relevant policy documents.
The initiatives and achievement under agriculture, keeping the welfare of the ‘Aam Aadmi’ in mind, increased the plan allocation for agriculture by 300 per cent between 2003-04 and 2008-09 and launched the Krishi Vikas Yojana in 2007-08 to increase growth rate of agriculture and allied sectors to four per cent during the Eleventh Plan period. A good initiative that requires bottom-up planning from village to taluka to District Agricultural Plans and aggregating to form State and National Plans. Its implementation is tardy and an imposition of a target from the top makes the approach self-defeating. Keeping 2003-04 as base, the government announced a package of doubling agricultural credit in three years and actually achieved a three-fold increase of credit by 2007-08. The fact that the Government had to come up with the Agricultural Debt Waiver and Debt Relief Scheme in June 2008 is itself perhaps indicative the ground work to make agriculture remunerative was not done which also means that appropriate project appraisals were not done by the banks while doubling/tripling of credit. The debt waiver is a book-keeping exercise. It does reduce the mental burden of the farmer and makes him eligible for fresh loans, but not a single rupee from this Rs.65,300 crore would lead to investments that is required to spruce up the agrarian economy.
On the one hand, the long overdue increase in the Minimum Support Prices (MSPs) in recent years is a bit of relief that would help improve the returns to agriculture. On the other hand, the Targeted Public Distribution System (TPDS) will ensure food security to those below poverty line. While talking of poverty, the Government should have updated the consumption-expenditure with appropriate nutritional measures, dealt on multi-dimensionality of poverty and on identification to avoid exclusion of the poor, of course, some of these go beyond the budget. Another matter of concern that remains is the huge subsidy bill on fertilizers, which largely goes to the industry and only indirectly to the farmers. There has been no increase in the fund allocated under Rural Infrastructure Development Fund (RIDF) when compared with the previous year.
Education, health and some other social sector initiatives are indicated. The question that one is haunted is, as indicated in the United Progressive Alliances (UPAs) Common Minimum Programme (CMP), whether the promise of doubling of public expenditure as a proportion of the Gross Domestic Product (GDP) achieved. A silence on this indicates that the answer is no.
Some of the notable initiatives in recent years have been the Right to Information and the National Rural Employment Guarantee Scheme (NREGS). Though there are hiccups, the efforts are indeed laudable. The need of the hour is to complement the wage-employment scheme with an equally comprehensive self-employment scheme. This requires revamping of the Sampoorna Gram Swarozgar Yojana (SGSY) through institutional innovation to help organize the poor, financial innovation to make required credit accessible and administrative innovation to improve facilitation. This is also very essential under the current financial crisis because it would encourage a large number of smaller players. Such an effort will also have its multiplier effects not only in stimulating the economy but more importantly in improving the livelihood of the poor and also help us in easing the load on agriculture.
The finance minister quotes Professor Amartya Sen while emphasizing on the need for security during this down turn, which has nothing to do with increasing defense related expenditure. More importantly, such protective security should also address the poor returns to farmers which on a per-capita per day basis is even lower then a liter of bottled water. Notwithstanding the increase in the revenue and fiscal deficits, one is left with the question, where is the ‘Aam Aadmi’?

Farm sector needs more policy priority-Dr. Swaminathan

THE interim budget rightly refers to farmers as the ‘real heroes’ of India’s success story, because of the contributions they are making in the areas of food, livelihood and ecological security.

The finance minister also said that the Plan allocation for agriculture has been increased by 300 per cent during the last five years and that a flagship programme, R a s h t r i y a Krishi Vikas Yojana, has been launched with an outlay of Rs 25,000 crore. Reference has naturally been made to the agricultural debt waiver and debt relief scheme covering 36 million families at a cost of Rs 65,300 crore. All this, however, cannot hide the fact that agriculture is facing serious economic and ecological crises. Obviously, only the regular budget for 2009-2010, which will be presented by the next government, can seriously address issues relating to agrarian distress and malnutrition.

There are some issues that need attention. Major political parties should commit themselves to establishing a farm income commission that can go into the totality of the income of farmers from crop and animal husbandry, fisheries, agroforestry and agro-processing, and suggest ways to ensure a minimum takehome income to farmers.

An allocation of Rs 30,100 crore has been made for the National Rural Employment Guarantee Scheme during 2009-2010. The scheme is designed to use labour for important activities such as water harvesting, watershed management, control of soil erosion and develop ment of irrigation struc tures. All these are impor tant for sustainable agri culture. Hence, it would be appropriate to refer to the participants as “defenders of India’s eco logical security”. Awards could be given to teams that have developed the best watershed and water h a r v e s t i n g programmes.

The allocation for Bharat Nirman has been raised to Rs 40,900 crore and a part of it will go to bringing new areas under irrigation. The enhance ment of the productivity of rainfed areas holds the key to the future of rural livelihood security as well as national food security.

The regular budget should consider the rec ommendations of the National Commission of Farmers on the steps needed for increasing the income of small produc ers, as well as the need for ensuring minimum sup port price not only for wheat and rice but also for millets, pulses, oilseeds and tuber crops. Provision needs to be made for establishing a national grid of warehous es for grains and cold stor age structures for perish able commodities. The mismatch between pro duction and post-harvest technologies should end.

Much has been done during the last five years to reduce agrarian dis tress. Much, however, remains to be done to do justice to the genuine needs of the majority of our population who con stitute the farming com munity.

Declining villages in shining India

By Muralidhar Rao

Farmers’ suicides in the country since 1997 has now touched 1,82,936 by December 2008. It seems there is no end to miseries of the farmers. So-called progressive states during the green revolution like Maharashtra, Andhra Pradesh, Karnataka and Punjab are some of the worst affected states.
More than two-third of rural Indians and 70 per cent in urban Indians are reporting that they don’t get a full intake of 2,700 kilo calories, defined to be a minimum norm. The percentage of people reporting that they don’t get two square meals a day is still relatively large. The levels of undernourishment and malnourishment continue to be shockingly high as per the NSSO data.

It is the fact that India is one of the fastest growing economies of the world. Gross Domestic Product (GDP) grew at the rate of 9 per cent during the year 2007-08. In the previous two years growth rate had been 9.4 per cent and 9.6 per cent respectively. Despite the fact that the world is facing deep recession, we may still achieve a growth rate of about 7 per cent.
Agriculture lagging
Government pats its back for the so-called unprecedented growth experience. What does GDP mean to an average person living in this country? If we have a look at the composition of GDP, it includes agricultural products including foodgrains, industrial products and services. On the one hand more of GDP should mean more of wheat and rice, more of cars and two wheelers and other industrial goods. It also means more of transport services, electricity, telecommunication etc. If we try to look into the factors leading to increase in GDP, we find that agriculture does not contribute to this growth experience. Whereas rate of growth of manufacturing and services had been above 10 per cent per annum, agriculture was lagging behind with an average growth of only 2.5 per cent in the last 5 years.
Industry is growing almost equal to the rate of growth of GDP and growth of services surpass all limits and as such the contribution of services sector to GDP jumps from 45.80 per cent in 1997-98 to 54 per cent in 2005-06, whereas gain of services is the loss of primary sector, contribution of which dips from 26.50 per cent to 18 per cent during the same period. Consequently, per capita production of foodgrains, pulses and edible oils show a declining trend. According to Economic Survey 2007-08, availability of foodgrain per capita per day which was 458 grams in 2002 declined to 412 grams in 2006 and pulses from 35.4 grams to only 32.5 grams during the same period. Per capita availability of edible oils declined from 9.0 kilograms in 1999-00 to only 7.2 kg. in 2002-03 and after that government deemed it fit not to publish these figures in the Economic Survey.
Consequent farmers’ suicides
Farmers’ suicides in the country since 1997 has touched 1,82,936 by December 2008. It seems there is no end to miseries of the farmers. So-called progressive states during the Green Revolution like Maharashtra, Andhra Pradesh, Karnataka and Punjab are some of the worst affected states. Relief package of Rs 5000 crore by the Prime Minister could not mitigate the problems of farming community of Maharashtra. This state again has crossed 4000 suicides mark for the third time in 4 years according to National Crime Records Bureau. In all 16,632 farmers have committed suicide in the country in 2007. Sixe 2002, the annual average of suicides has increased to 17,366.
Poverty and undernutrition
Under these circumstances how can we imagine any better position for the poor living in rural areas? National Family Health Survey conducted by Ministry of Health and Family Welfare also supports the hypothesis that vast majority of population is still reeling under poverty. The survey says that 46 per cent of all children are underweight and 38 per cent are stunted (too short for their age) and 19 per cent are wasted (too thin for their height). The Survey conducted three times in the past 15 years, concludes that some of these indicators have actually worsened over the years.
According to National Sample Survey Organisation (NSSO), nutritional intake of India is declining. NSSO says that during 1993-94 and 2004-05 calorie intake in both rural and urban India has declined by 4.9 and 2.5 per cent respectively. Protein intake in rural areas is down by 5 per cent. More than two-third of rural Indians and 70 per cent in urban Indians are reporting that they don’t get a full intake of 2,700 kilo calories, defined to be a minimum norm. The percentage of people reporting that they don’t get two square meals a day is still relatively large. The levels of undernourishment and malnourishment continue to be shockingly high as per the NSSO data.
Jobless growth
The paradox of galloping growth and with deepening poverty in the country is explained by the phenomenon of jobless growth. No doubt GDP is rising and rising at a fast pace, but not enough jobs are being created. This has resulted in rising rate of unemployment in the country both in the rural and the urban areas. We note that the rate of unemployment which was 7.3 per cent in urban areas and 7.2 per cent in rural areas (males) in the year 1999-2000 as per 55th round of NSSO, which increased to 7.5 per cent and 8.0 percent in urban and rural areas respectively. Similar is the condition with regard to females where rate of unemployment increased from 9.4 per cent and 7.0 per cent in 1999-2000 year as per 55th round of NSSO to 11.6 per cent and 8.7 per cent in the years 2004-05 in the urban and rural areas respectively. The rise in joblessness in the urban areas should be taken as an extension of the rural displacement. Employment in the organised sector shows a decline from 172 lakh to 164.52 lakh. Much hyped organised private sector also shows only a marginal increase from 84.32 lakh to only 84.52 lakh jobs during 2002 and 2006. This clearly implies that casualisation of employment is on rise. Even the much trumpeted National Rural Employment Guarantee Programme could not produce any desired results. This has been conceded by Vice Chairman of Planning Commission.
Poverty reduction slowing down
We witnessed a high rate of GDP growth in the post 1991 period, which is claimed to be a big argument in favour of economic reforms. But, even the most vocal supporter of economic reforms, Montek Singh Ahluwalia, also concedes that reforms have not resulted in desired level of poverty reduction and decline in poverty is less than what the government had perceived. His confession is supported by the findings of NSSO 61st Round data, which clearly speaks out that in the post reform period the pace of poverty reduction has not only been much lower than the official assessments made after NSSO. 55th Round, it is also less than the actual pace of reduction recorded during 1970’s and 1980’s. Thus, it is amply clear that the high rate of growth of GDP recorded in the post reform period has not made lives better for poor in the same proportion. Rather, in the post reform period inequalities have accentuated as shown by higher ‘Gini Coefficient’ (a measure of inequality), which shows an increase in ‘Gini Coefficient’ from 28.6 per cent in 1993-94 to 30.5 per cent in 2004-05 for rural India and an increase from 34.4 per cent in 1993-94 to 37.6 per cent in 2004-05 in urban India. Most notable is the fact that it is a reversal of the trend seen in the previous decade (1983 to 1993-94). These figures imply that poor have fewer claims on growth and rich have taken the bulk of the benefits from the GDP growth. These figures are not only true for all India, but are applicable for almost all states except a few. If we go on riding this high growth, pro-reform phenomenon, it is an alarming signal for times to come.
Loan waiver: No solution for distress in agriculture
In the Union Budget 2008-09, the government announced a scheme of loan waiver for the farmers. With subsequent extension of loan waiver, a total of Rs 70,000 crore were allocated for the purpos
e. But despite this scheme, condition of agriculture and poor agriculturists is still not improved. In fact this scheme is applicable to loans dispersed by the banks and other institutions only. Mostly poor farmers don’t have access to such formal institutions. The government has so far not made any effort to address the problems of the farmers like provision of cheap credit, minimum support price for most of the agricultured products and other agricultural inputs at cost effective prices.
(The writer is member of BJP National Executive.)

Neo-Liberal Terrorism in India: The Largest Wave of Suicides in History

CounterPunch, Feb 12 2009
The number of farmers who have committed suicide in India between 1997 and 2007 now stands at a staggering 182,936. Close to two-thirds of these suicides have occurred in five states (India has 28 states and seven union territories). The Big 5 – Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and Chattisgarh– account for just about a third of the country’s population but two-thirds of farmers’ suicides. The rate at which farmers are killing themselves in these states is far higher than suicide rates among non-farmers. Farm suicides have also been rising in some other states of the country.
It is significant that the count of farmers taking their lives is rising even as the numbers of farmers diminishes, that is, on a shrinking farmer base. As many as 8 million people quit farming between the two censuses of 1991 and 2001. The rate of people leaving farming has only risen since then, but we’ll only have the updated figure of farmers in the census of 2011.
These suicide data are official and tend to be huge underestimates, but they’re bad enough. Suicide data in India are collated by the National Crime Records Bureau (NCRB), a wing of the Ministry of Home Affairs, government of India. The NCRB itself seems to do little harm to the data. But the states where these are gathered leave out thousands from the definition of “farmer” and, thus, massage the numbers downward. For instance, women farmers are not normally accepted as farmers (by custom, land is almost never in their names). They do the bulk of work in agriculture – but are just “farmers’ wives.” This classification enables governments to exclude countless women farmer suicides. They will be recorded as suicide deaths – but not as “farmers’ suicides.” Likewise, many other groups, too, have been excluded from that list.
The spate of farm suicides – the largest sustained wave of such deaths recorded in history – accompanies India’s embrace of the brave new world of neoliberalism. Many reports on that process and how it has affected agriculture have been featured right here, on the Counterpunch site. The rate of farmers’ suicides has worsened particularly after 2001, by which time India was well down the WTO garden path in agriculture. The number of farmers’ suicides in the five years – 1997-2001 – was 78,737 (or 15,747 a year on average). The same figure for the five years 2002-06 was 87,567 (or 17,513 a year on average). That is, in the next  five years after 2001, one farmer took his or her life every 30 minutes on average. The 2007 figures (detailed below) place that year, too, in the higher trend.
What do the farm suicides have in common? Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal “economic reforms,” from 26 per cent of farm households to 48.6 per cent. We know that from National Sample Survey data. But in the worst  states, the percentage of such households is far higher. For instance, 82 per cent of all farm households in Andhra Pradesh were in debt by 2001-02. Those who killed themselves were overwhelmingly cash crop farmers – growers of cotton, coffee, sugarcane, groundnut, pepper, vanilla. (Suicides are fewer among food crop farmers – that is, growers of rice, wheat, maize, pulses.) The brave new world philosophy mandated countless millions of Third World farmers forced  to move from food crop cultivation to cash crop (the mantra of “export-led growth”). For millions of subsistence farmers in India, this meant much higher cultivation costs, far greater loans, much higher debt, and being
locked into the volatility of global commodity prices. That’s a sector dominated by a handful of multinational corporations. The extent to which the switch to cash crops impacts on the farmer can be seen in this: it used to cost Rs.8,000 ?($165 today) roughly to grow an acre of paddy in Kerala. When many switched to vanilla, the cost per acre was (in 2003-04) almost Rs.150,000 ($3,000) an acre. (The dollar equals about 50 rupees.)
With giant seed companies displacing cheap hybrids and far cheaper and hardier traditional varieties with their own products, a cotton farmer in Monsanto’s net would be paying far more for seed than he or she ever dreamed they would. Local varieties and hybrids were squeezed out with enthusiastic state support. In 1991, you could buy a kilogram of local seed for as little as Rs.7 or Rs.9 in today’s worst affected region of Vidarbha. By 2003, you would pay Rs.350 — ($7) — for a bag with 450 grams of hybrid seed. By 2004, Monsanto’s partners in India were marketing a bag of 450 grams of Bt cotton seed for between Rs.1,650 and Rs.1,800 ($33 to $36). This price was brought down dramatically overnight due to strong governmental intervention in Andhra Pradesh, where the government changed after the 2004 elections. The price fell to around Rs.900 ($18) – still many times higher than 1991 or even 2003.
Meanwhile, inequality was the great man-eater among?the “Emerging Tiger” nations  of the developing world. The predatory commercialization of the countryside devastated all other aspects of life for peasant farmer and landless workers. Health costs, for instance, skyrocketed. Many thousands of youngsters dropped out of both school and college to work on their parents’ farms (including many on scholarships). The average monthly per capita expenditure of the Indian farm household was just Rs.503 (ten dollars) by early this decade. Of that, 60 per cent roughly was spent on food and another 18 per cent on fuel, clothing and footwear.
Farmers, spending so much on food? To begin with, millions of small and marginal Indian farmers are net purchasers of food grain. They cannot produce enough to feed their families and have to work on the fields of others and elsewhere to meet the gap. Having to buy some of the grain they need on the market, they are profoundly affected by hikes in food prices, as has happened since 1991, and particularly sharply earlier this year. Hunger among those who produce food is a very real thing. Add to this the fact that the “per capita net availability” of food grain has fallen dramatically among Indians since the “reforms” began:  from 510 grams per Indian in 1991, to 422 grams by 2005. (That’s not a drop of 88 grams. It’s a fall of 88 multiplied by 365 and then by one billion Indians.) As prof. Utsa Patnaik, India’s top economist on agriculture, has been constantly pointing out, the average poor family has about 100 kg less today than it did just ten years ago – while the elite eat like
it’s going out of style.  For many, the shift from food crop to cash crop makes it worse. At the end of the day, you can still eat your paddy. It’s tough, digesting cotton. Meanwhile, even the food crop sector is coming steadily under corporate price-rigging control. Speculation in the futures markets pushed up grain prices across the globe earlier this year.
Meanwhile, the neoliberal model that pushed growth through one kind of consumption also meant re-directing huge amounts of money away from rural credit to fuel the lifestyles of the aspiring elites of the cities (and countryside, too). Thousands of rural bank branches shut down during the 15 years from 1993-2007.
Even as incomes of the farmers crashed, so did the price they got for their cash crops, thanks to obscene subsidies to corporate and rich farmers in the West, from the U.S. and EU. Their battle over cotton subsidies alone (worth billions of dollars) destroyed cotton farmers not merely in India but in African nations such as Burkina Faso, Benin, Mali, and Chad. Meanwhile, all along, India kept reducing investment in agriculture (standard neoliberal procedure). Life was being made more and more impossible for small farmers.
As costs rose, credit dried up. Debt went out of control. Subsidies destroyed their prices. Starving agriculture of investm
ent (worth billions of dollars each year) smashed the countryside. India even cut most of the few, pathetic life supports she had for her farmers. The mess was complete. From the late-’90s, the suicides began to occur at what then seemed a brisk rate.
In fact, India’s agrarian crisis can be summed up in five words (call it Ag Crisis 101): the drive toward corporate farming. The route (in five words): predatory commercialization of the countryside. The result: The biggest displacement in our history.
Corporations do not as yet have direct control of Indian farming land and do not carry out day-to-day operations directly. But they have sewn up every other sector, inputs, outlets, marketing, prices, and are heading for control of water as well (which states in India are busy privatizing in one guise or another).
The largest number of farm suicides is in the state of Maharashtra, home to the Mumbai Stock Exchange and with its capital Mumbai being home to 21 of India’s 51 dollar billionaires and over a fourth of the country’s 100,000 dollar millionaires. Mumbai shot to global attention when terrorists massacred 180 people in the city in a grisly strike in November. In the state of which Mumbai is capital, there have been 40,666 farmers’ suicides since 1995, with very little media attention.
Farmers’ suicides in Maharashtra crossed the 4,000-mark again in 2007, for the third time in four years, according to the National Crime Records Bureau. As many as 4,238 farmers took their lives in the state that year, the latest for which data are available,?accounting?for a fourth of all the 16,632 farmers’ suicides in the country. That national total represents a slight fall from the 17,060 farm suicides of 2006. But the broad trends of the past decade seem unshaken. Farm suicides in the country since 1997 now total 182,936.
To repeat, the five worst affected states?– Maharashtra, Andhra Pradesh, Karnataka, Madhya Pradesh and Chattisgarh?– account for two-thirds of all farmers’ suicides in India. Together, they saw 11,026 in 2007. Of these, Maharashtra alone accounted for?over 38 per cent. Of the Big 5, Andhra Pradesh saw a decline of 810 suicides against its 2006 total. Karnataka saw a rise of 415 over the same period. Madhya Pradesh (1,375) posted a decline of 112. But Chattisgarh’s 1,593 farm suicides mean an increase of 110 over 2006. Specific factors in these states nourish the problem. These are zones of highly diversified, commercialized agriculture where cash crops dominate. Water stress has been a common feature, and gets worse with the use of technologies such as Bt seed that demand huge amounts of water. High external inputs and input costs are also common, as also the use of chemicals and pesticides. Mindless deregulation dug a lot of graves, lit a lot of pyres.
Maharashtra registered a fall of 215 farm suicides in 2007. However, no other state even touches the 3,000 mark. And AP (with 1,797) and Karnataka (2,135) – the next two worst hit states – together do not cross Maharashtra’s 4,000-plus mark. A one-year dip of 221 occurred in 2005 too, in Maharashtra, only to be followed by an all-time high of 4,453 suicides in 2006. The state’s trend shows no turnaround and remains dismal.
Maharashtra’s 2007 figure of 4,238 follows one and a half years of farm “relief packages” worth around Rs.5,000 crore ($1 billion) and a prime ministerial visit in mid-2006 to the distressed Vidharbha region. The state has also seen a plethora of official reports, studies and commissions of inquiry over 2005-07, aimed at tackling the problem. However, the 12,617 farm suicides in the same years is its worst ever total for any three-year period since the state began recording such data in 1995. Indeed, farm suicides in Maharashtra since that year have crossed the 40,000 mark. The structural causes of that crisis seem untouched.
Nationally, farmers’ suicides between 2002-07 were worse than for the years 1997-2001. NCRB data for the whole country now exists from 1997-2007. In the five years till 2001, there were 15,747 farmers’ suicides a year on average. For the six years from 2002, that average is 17,366 farmers’ suicides each year. The increase is distressingly higher in the main crisis states.
P. Sainath is the rural affairs editor of The Hindu and is the author of Everybody Loves a Good Drought. A regular contributor to CounterPunch,  he can be reached at

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Fraud on the nation: Krushi bank, Nagarjuna, Subiksha, Satyam what next?

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Today watching the entire episode of SATYAM computers and biggest corporate fraud the MD hatched in the history of India brings back some fundamental questions on the model of development we are planning for all of us.  Software industry, Biotech industry, Retail chains, real estate, private banks and power sector are which are shown as icons of developments are seen suddenly falling. 

Ramalinga Raju, SATYAM, Managing Director after getting caught in the controversies of buying shares in MYTAS infra (owned by ramalingaraju’s son and its name is reverse of SATYAM) and also getting blacklisted by World Bank on charges of malpractices today agreed that he the company balance sheets were manipulated to the extent of 5040 crores.  Its shares have dipped by more than 70 % and the share holders lost more than the directors who have invested in the company.  There are also questions raised on FDI marginalising the promoters and there by reducing their accountability etc.

Subiksha retail chain which is one of the first retail chains which came with a big fan fare closed down its operation last month in AP.  Other retail chains are on the way (today’s local newspapers say most of them are making huge losses)

Last month the managing director of Nagarjuna Group was arrested for the financial crimes in the Nagarjuna finances.  As you may be aware some time back private banks suddenly started falling Krushi Bank, Charminar Bank, Prudential Bank….the list if long

Are we going to learn lessons or going to continue more of the same?  Who decides our future ?