Agrarian distress and its manifestation in the form of suicides has to be dealt with in all seriousness, beginning from soothing broken-both mentally and financially-families to longer term remedies of correcting the crisis itself.
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Agrarian Crisis and Farmer’s Suicide in Punjab – Need for Corrective Political Action
1. Agrarian Crisis and Farmer’s Suicide in
Punjab – Need for Corrective Political Action
Farmers’ suicide is a consequence of deep –rooted agrarian rural distress as well as of four
important factors: technological, ecological, socio-cultural, and finally policy factors. Suicides
by farmers were first highlighted by the media in the states of Maharashtra, Kerala, Karnataka
and Andhra Pradesh. These were attributed to the poor economic status of the farmers there, in
view of widespread poverty. But then came the reports of suicides by farmers in the grain bowl
of India-Punjab-which was perturbing and quite unexpected in such a prosperous region. So long
as suicide remained an occasional and stray incident, it did not generate much public concern.
But when the incidence showed an upward trend and affected a large section of society, in the
mid-eighties, it became a public issue, to be viewed, studied and analyzed in all its seriousness.
Punjab, a rather small state occupying less than 2 per cent of total geographical area and little
more than 2 per cent of the total population of the country, has earned the title of “India’s bread
basket.” The state was viewed as the most dynamic and progressive state of the country,
particularly on account of its success in the agrarian sector during the green revolution. Of all the
states of India, Punjab’s agricultural growth rate was the highest during the 1960s to the middle
of the 1980s which was the first phase of the green revolution. However, the elation did not last
for very long. After two decades of growth, the green revolution began to lose its magic, and was
followed by the series of crisis. Beginning with the early 1980s, the word crisis became the
dominant mode of representing Punjab. From politics and economics to culture and ecology,
everything seemed to be in a state of crisis in Punjab. At present, the state of Punjab, earlier
regarded as an agriculturally developed region of India, has been passing through a severe
economic crisis.
The paradoxical situation of rising of cost of cultivation with stagnant productivity and minimum
support price reduced returns from agricultural operation. The reduction of differentials between
returns and cost of production, the increasing uncertainty of weather as well as a dependence on
borrowed money at higher rates of interest from moneylenders were the reasons responsible for
increasing the indebtedness among farmers of Punjab. It has compounded problems to the extent
that farmers of Punjab resorted to committing suicides. If we ponder over the root causes of
agrarian crisis and consequent farmers’ suicide in the State, we will find that on the one hand,
commercialization of agriculture, which has become prominent, needs more money to invest and
in the agriculture set up borrowing is a necessity. It is neither objectionable nor a sign of
weakness. But on the other hand, the institutional lending is inadequate and costly and farmers,
particularly small and marginal farmers, have to resort to private non-institutional sources of
finance, which have their own ways to exploit and squeeze the farmers’ net income. The
institutional credit mechanism fails to fulfill the demand for credit in the state in both quantity
and quality. Consequently, farmers live in a vicious cycle of debt, pressure, guilt, and lies that
drive them further into more debt. Therefore, failure of the institutional credit mechanism was
2. the root cause of the crisis and its manifestation into the distress act of suicides by farmers in
Punjab.
Over the past decade, the state has experienced deceleration of its economy and has slipped in
the ranking of the prosperous states in the country. The crisis in agriculture has manifested itself
in the form of stagnating productivity, rising cost of production, decelerating income, shrinking
employment, escalating indebtedness and ecological imbalance. One of the main consequences
of this agrarian distress has been that the marginal and small farmers, who find it increasingly
hard to sustain on farming, are getting pushed out from agricultural sector. These farmers are not
being fully absorbed outside this sector due to the unfavourable nature and structure of the
industrial sector in the state. Thus, a large chunk of ‘reserve army of labour’ is prevalent in the
economy. It is estimated that about 35 lakh persons are unemployed in Punjab, out of which
about 24 lakh belong to rural areas. The fact remains that there is a decline in the proportion of
cultivators in the total workforce of the state that has added to the unemployed or semi-employed
force, and has put pressure on an already over-crowded agricultural labour market.
The situation has worsened to the extent that young farmers have become the victims of suicides.
The surviving families of farmers who commit suicide are predominantly female. Women often
become the sole supporters of families. These women, who previously managed the domestic
sphere and perhaps engaged in light fieldwork, now find themselves playing the new role of
breadwinner and sustaining their families amidst extreme outstanding debt. While most rise in
the face of adversity to sustain their families, many remain deeply depressed and in a state of
desperation. The attitude of the State administration is also pushing the people to the extreme.
Villagers fear seeking help from State officials since they are often accused of causing the
suicide, which is a crime under the Indian Penal Code. Therefore, it is fair to argue that such
State Government mismanagement at the least fails to prevent suicides.
Need for Corrective political action
This is the crucial angle on which hinges the future roadmap of agriculture. What is required is
an agriculture model tailored to the needs of market and that should be the government’s answer
to the crisis. There is clear polarisation of views on efficacy of the view that the market that take
care of its own will take care of agriculture too or not. However, the government should be clear
on which direction to go keeping in mind the requirement of all sections of the famers of the
state. The then Congress Government in Punjab had launched a plan to introduce 1936 formula
once advocated by the well known farmers’ leader Sir Chotu Ram. This formula envisages
waiver of loans if farmers have paid as much interest as the principal amount. The formula,
which became an act, is not applied any more. To develop farming sector and to increase the
farming efficiency, it was recommended to enhance the accessibility of small and marginal
farmers to formal agricultural credit. According to the results, it was also suggested that loan for
the livestock should be enhanced. Thus, by providing more credit for the purpose of livestock
would definitely enhance farmer’s income and ultimately would reduce poverty.
3. The then Government of India advised the financial institutions to double the supply of
agricultural credit in three years, from 2004 to 2007. In the subsequent annual budgets,
Government of India had announced targets for credit to agriculture to ensure adequate credit
flow to the sector. The flow of agriculture credit since 2003-04 has consistently exceeded the
target. To mitigate the distress of farming community, in general, and small and marginal
farmers, in particular, and to declog the institutional credit channels and make farmers eligible
for fresh credit, the Debt Waiver and Debt Relief Scheme, 2008 was announced in the Union
Budget for 2008-09. The then Government had implemented a package for revival of Short-term
Rural Cooperative Credit Structure in the country. The Revival Package aimed at
reviving/strengthening the Short-term Rural Cooperative Credit Structure (CCS) and to make it a
well-managed and vibrant medium to serve the credit needs of rural India, especially the small
and marginal farmers.
The 11th plan period was a period of action. During the period, policy focus was on increasing
the flow of agricultural credit. Firstly, target was given to the banking sector to double the flow
of credit to agriculture in a matter of three years, and later came the announcement of
agricultural debt waiver [and one time settlement scheme for large farmers]. This period saw an
increase in the flow of credit to agriculture from 2,54,657 Crore (2007-08) to 4,46 ,779 crores
(2010-11). The period was an interesting one not only because of the thrust in the flow of
agricultural credit and increased policy attention towards the growth of credit, but also from the
perspective of institutional reform. There are also committees and commissions that the central
government had appointed to analyse the reasons for farmers’ committing suicide.
It has now become an imperative that first the demand for agricultural credit in each state/region
be assessed depending on crop patterns and current inputs and capital requirements in relation to
targeted output growth rate and then, policy framework should be put in place to meet those
requirements, instead of increasing the credit supply uniformly in all the states/regions of the
country. Such a policy sometimes proves counterproductive and that appears to have happened in
the Punjab agriculture.
There are many kinds of unconventional risks emerging in the agrarian economy of Punjab,
which if not estimated and addressed properly may pose a severe challenge to its sustainability
and hence food productivity as well as the farm incomes. This risk may further endanger the
food security position of the nation and may increase the vulnerability of the poor in the country.
The decline in ground water has resulted into an increased consumption of power by the
agricultural sector. The cost of cultivation has increased. Therefore, water harvesting
management and construction of water embankments need serious attention of the Government.
The ambiguous path of development has not created debt free farmers. On the contrary debts of
farmers have been multiplying. Institutionalized credit system had failed to address the issues of
rural indebtedness. This is the reason why moneylenders have transformed themselves into a
form of sharecroppers or absentee owners. Many a time the agreement that the farmers entered
into with the money lending class is either in the oral form or in the written form, which has no
legal sanctity. This has aggravated the problem, particularly the families of deceased- the state
would not recognize the loan taken from the moneylenders except the institutions.
4. Lack of access to credit is a severe constraint for many farmers in Punjab. The shortage of credit
availability or capital constraint faced by the farmers is one of the major problems in the
adoption of modern technologies and efficiency improvement in the agriculture sector. There are
several irritating and bureaucratic hassles in obtaining an institutional credit. Studies have found
that a farmer on an average has to incur Rs.4016 for obtaining a loan from a commercial bank,
which amounts to about 5 per cent of his total loan. In the case of cooperatives, the transaction
costs have been worked out to be much lower, around 1.2 per cent of the loan and cooperatives
are located right in the villages. In spite of significant increase in institutional lendings, the mal-
practices prevailing in the system make this lending more cumbersome and costly. Therefore, it
is high time to address these inadequacies of the institutional sources. Considering the distinctive
characteristics of agricultural credit, especially in developing nations, it should be reasonable for
the government to support rural and farming sector development. The farming sector
development could be achieved by scheduling an adequate policy framework for more efficient
performance of rural financial market.
To conclude, the Punjab state is a major agricultural state which is important from national food
security point of view as well. However, there has been a recent slowdown in agricultural growth
and large scale degradation of soil and water degradation has been witnessed. It is significant to
note that even though farmers are migrating from agriculture, about one-third of the marginal
and small farmers were dissatisfied with their new occupations and wanted to shift to another
profession. In such a situation, it is of utmost importance to address the problem of the small
farmers who are leaving farming. There is a need to look into the viability of the farming sector,
particularly of small farmers. The gradual withdrawal of the state from active participation in
development activities has resulted in sharp decline in public investment in agricultural
infrastructure and research.
Clearly, suicide is not an individual act. It is a reflection of the total failure of state policies and
economic mechanisms that are being dictated by the dynamics of global capital. Farmers’
suicides in Punjab and across the country in other states are the tip of the iceberg indicating the
plight of millions of the rural poor. It is the breakdown of a system that is affecting a multitude
of people in different ways. Those who own little land as well as the large section of the landless
that is dependent on wage labour in the agricultural economy have much at stake both in the
struggle for a life of dignity as well as a future for their children.
The problem of suicides in farming community needs, therefore, to be tackled in a holistic way.
Awareness among farmers will have to be created to avoid unproductive expenditure as well as
efficient use of investments in irrigation structures through adopting efficient water use
measures. Crop insurance programme need to be strengthened, especially in cash crops like
cotton, where the yield and price variability are relatively high. Innovative loan settlement
mechanisms need to be developed in the case of crop failure so that the farmers can cope with
falling incomes and tide over financial crises. Regulation of non-institutional lenders is necessary
to prevent them from charging exploitative rates of interest from farmers and pushing them into a
debt trap.
Government and social institutions should be made proactive in addressing the economic distress
of farmers during the economic squeeze arising out of climate change or market failure.
5. Education is very important for human resource capacity-building in economic activities as well
as for coping with social problems. The government should, therefore, strengthen the educational
network in these areas to improve literacy levels of rural people in order to equip them for better
livelihoods and to cope with economic distress.
Suicides among farmers are avoidable. This would require preventive and remedial measures to
avoid agrarian stress on one hand and relief plus rehabilitation of victim families on the other.
There is need to pass a law for debt redemption among farmers. At the same time, identified
victim families need to be provided with compensation and rehabilitation package. In fact, the
poor farmers need to be given a comprehensive social security as suggested by the National
Commission for Enterprises in Unorganized Sector (NCEUS) 2007. Within agriculture sector,
efforts should be made for group cultivation (may be cooperative farming) for small and
marginal farmers along with taking up of marketing and processing activities by these
cooperatives. Rural education and health has to be put on the rails.
The children from rural areas must be given quality education and make them to access skills at
affordable costs enabling to take up jobs in modern sectors outside the agriculture so that
pressure on agriculture can be reduced. The country needs proper education and employment
policy in a coordinated manner.
Majority of the farmers in Punjab are small farmers and, therefore, the technology promoted in
agriculture should be the one that is better able to safeguard the interests of these small farmers.
Remedies, thus, have to be found not only in terms of short term or immediate solutions to
suicides, but also long term solutions to end the agrarian crisis itself. While immediate measures
could include relief, mainly financial relief, to the families of suicide victims, and attempts at
their rehabilitation, the long term measures to ‘nip the evil in the bud’ should comprise of
attempts at rural industrialization. This could be done on the lines of how and what has been
undertaken in East Asian countries especially in Taiwan. Farmers’ cooperatives, sans
middlemen, to produce, process and market output on the farm gates can be a way out. This
would not only provide the agricultural sector with a much needed diversification from the
wheat-paddy rotation, but also prove to be remunerative in terms of incomes and employment.
Farmers’ organizations must engage themselves to start collectively processing and marketing
enterprises rather than purely depending on agitations for more remunerative prices. Asking for
rights along with engaging in industrial activities has a capacity to eliminate the middlemen who
thrive on surpluses generated through processing and marketing activities. State government
apart from supporting and extending cooperation must become innovative to articulate policies in
the fast globalizing world to prod farmers’ organizations to initiate those activities which
integrate the processing and marketing activities on the farm gates. This also underlines that the
state and state-run financial institutions would have to alter their system of lending-loans and
would have to be made adequate, timely, cheap and commensurate with demand. The red tape
and additional costs involved, which makes institutional loans so unattractive, would also have to
be cut drastically.
Agrarian distress and its manifestation in the form of suicides has to be dealt with in all
seriousness, beginning from soothing broken-both mentally and financially-families to longer
6. term remedies of correcting the crisis itself. There can be no short cuts, only patient, persistent
efforts by learning, adapting, adopting and implementing.
* The Author is an Advocate and a National Spokesperson of the Indian National Congress.