Crux of Farmer Suicide issue
Farmer Suicide issue (Frontline + other articles)
- The lack of institutional credit and insurance cover for crop failure and the highly fractured small holdings of the overwhelming majority of cultivators have led to a steep rise in tenant farming.
- The 2011 agriculture census shows that about 86 per cent of the cultivators own less than five acres of land, while the rest own 45 per cent of all farmlands.
- Less than 25 per cent of those who committed suicide were sugarcane cultivators. Their distress is a nationwide problem because of the crash in sugar prices—from Rs.33-34 a kilogram 18 months ago to the present Rs.19.
- Despite strict laws, moneylenders have been charging exorbitant rates of interest and harassing farmers for repayment.
- The simple rate of interest charged by microfinance agencies operating through SHGs ranged between 18 and 24 per cent, and in some cases it was as high as 36 per cent.
- But it is not just the high rate of interest that puts pressure on borrowers, a member with outstanding loans faces pressure that cannot be ignored.
- Banks are willing to lend to large borrowers even if the loans threatened to turn into non-performing assets but were unwilling to lend even Rs.50,000 to a small cultivator for animal husbandry.
- Private lending was filling the void caused by the collapse of institutional credit. The only sensible way of attacking usurious lending practices is to get institutional credit back on track.
- Since banks hesitate to lend, so the farmers end up taking high-cost private loans, which means an increase in production costs. This, coupled with the lack of insurance cover for crop damage or failure
- In most cases many factors come together to prompt the unfortunate step. And besides the frustration and desperation vis-a-vis the prevailing agrarian situation, there are also lots of non-farming causes, like social and personal reasons, including alcoholism and debts incurred because of non-farming activities.
- Most of the suicides are not by landless farmers but by farmers who own three to five acres of land, farmers who can dispose of a portion of their holdings and manage their debts easily.
- In Karnataka Deputy Commissioners have been asked to send case-wise reports on these suicides. As a long-term measure, Government is setting up a “vision group” under Dr M.S. Swaminathan to study agricultural conditions in the Karnataka State.
- The group will have on board a social scientist, a financial analyst, a cooperative bank representative, a market specialist, a psychologist, and an agriculture expert. The farming community will also have representation.
- The government seems to be avoiding the fact that one of the main reasons for the suicides is bankruptcy. It misses the point when it talks about alternatives because in a way it questions the farmers’ skills instead of addressing the core issue, which is lack of access to money.
- To have a State-level Agricultural Prices Commission, modeled on the National Commission for Agricultural Costs and Prices.It ought to be more holistic, studying incomes of farmers rather than focusing on merely input costs and the prices of agricultural produce
- Farmers ought to enhance their collective bargaining capacity. This would make their income streams more predictable and ensure stability.
- It is necessary to ensure that no farmer is required to depend on a single source of income; nor should any field depend on a single crop.This would result in multiple sources of income.
- But to ensure that this succeeds we need to develop backward and forward linkages so that the farmer has the capacity to not only grow multiple crops but market them.