As suicides continue unabated, India needs fresh strategies for mitigating risk, enhancing productivity, income and strengthening market linkages for businesses and cultivators

Farmer suicides continue to plague the country. According to the latest data released by the National Crime Records Bureau (NCRB), 10,349 farmers committed suicide in 2018, which is only marginally less than the figures for 2016 when 11,379 cultivators took the extreme step. The figures for 2017 have been withheld in the report. Maharashtra leads the suicide list (17,972) followed by Tamil Nadu (13,896), West Bengal (13,255), Madhya Pradesh (11,775) and Karnataka (11,561).

Large swathes of cotton farms in central India have been the epicentre of a debt crisis that has gripped the rural population. For years now, this crisis has driven thousands of farmers to take their own lives. These suicides are not merely a loss of human lives, they are debilitating scars on our nation’s development canvas. While debates continue to rage on reforming the agricultural sector to improve the economic conditions of the growers, there has not been any attempt to focus on the possible psychological problems arising out of economic stress that may be leading to these actions.

For every cultivator who takes his own life, a family is hounded by the debt he leaves behind, typically resulting in children dropping out of school to become farm hands. Farmers’ suicides have to be tackled on several fronts and addressing mental health problems is just one of them but it is certainly a major part of the solution.

The lack of focus on marginal and sub-marginal farmers, tenants, sharecroppers, oral lessees and non-cultivator households has further compounded the agricultural conundrum. We need fresh thinking on strategies for mitigating risk, enhancing productivity and income and strengthening market linkages for businesses and farmers for better profits. Simplifying mortgage requirements and procedures, rationalising stamp duty for loans to small and marginal farmers and providing agricultural and business extension services in the farm and non-farm sectors respectively can go a long way towards providing resilience to the agricultural community.

Economic reforms and the opening of agriculture to the global market over the last two decades have made small farmers vulnerable to unusual changes and fluctuations. Small growers now have to compete with larger ones, who are well-endowed with capital, irrigation facilities and supplementary businesses to buffer them against any shocks. As a fallout, peasants are facing what has been called a “scissors crisis”, which is driven by the rising cost of inputs without a commensurate increase in output price.

Peasants take loans from moneylenders at exorbitant rates of interest in order to buy expensive transgenic seeds and high-cost fertilisers that allow them to merely feed themselves and their cattle. They hope for better yields in the future but this time never quite comes. Eventually, many farmers find themselves in a debt trap as they keep pursuing the vain mirage of a golden crop bonanza. Owing more than they earn, the steadiest of these workers have become gamblers at the highest of stakes, betting their land and their lives on a better crop. As debt mounts, many growers are now making a permanent escape from the physical and emotional pain by ingesting deadly pesticides.

There is an inextricable link between small holder farmers and the health of our planet, just as there’s a link between us and these small holder cultivators. They play a highly critical role in protecting the environment. Many small holder growers lack the resources they need to sustainably cultivate high-yielding, nutritious and marketable crops. The pressure to feed their families and sell their crops to pay off other debts means the soil is often overworked.

These cultivators have to be taught smart agriculture practices, like harvesting rainwater, using organic fertilisers and undertaking intercropping to preserve their soil. They must have access to more resources like small farm loans, real-time weather and pest updates. Information on accurate market prices for their crops can help them make the most of their farms all year-round.

Despite their vast numbers, small farmers are not a solidified group and have not developed their negotiating power. Social divisions among the rural population have been the main reason why rural voters have failed to push for policies that boost their incomes. The large size of this population and its heterogeneity limit its influence on public policy. Farmers’ refusal to give precedence to their economic interests over their other ethnic and caste loyalties have limited their influence over public policies.

The Government needs to revamp its services so that growers have access to the latest technology and field practices. Agricultural universities must be involved in creating tailored educational programmes that serve the diverse needs of the rural population. Peasants need to learn how to work with limited land in a productive and environmentally friendly way. They do not only need better plant species but also up-to-date guidance on how to grow them. They do not need high-tech tractors controlled by satellites but they do need access to regional databases that provide information on soil quality. They also need access to affordable capital so that they no longer pile up unmanageable debt loads.

Loan waivers are both “bad politics” and “bad economics.” Indebtedness is the most acute problem faced by small and marginal farmers. However, their borrowings are primarily from moneylenders and hence a loan waiver is not going to make any sense for them. It is the richer farmers who are the real beneficiaries of such populist policies.

The problems faced by small farmers are complex and require a ruthless political will to address them. Their landholdings are below the economically viable threshold — the result is the cyclical appearance of bad loans and poor rainfall. Loan waivers have little to do with ending the conditions that lead to such problems.

Debt relief programmes fail to provide assistance to landless farmers, who do not have access to bank loans and some other growers, who depend on money-lenders. The write-offs are a disincentive to the banking system because people have expectations of future waivers as well.

The borrowers see value in strategic defaults. While it is important for banks to make credit available to farmers so that they can leverage and do better, it is also important to maintain credit discipline.

Loan waiver schemes vitiate the credit culture and make it tougher for banks to continue lending to these segments. They create moral hazards in the financial system by rewarding those farmers who default on their loans, offering nothing to those who pay. They do not take into account the loans growers have taken from the informal sector. There is also no distinction between voluntary and involuntary defaults, so it actually rewards those that have willfully defaulted. Additionally, the scheme does not take into account climatic conditions and fertility of soil. Farmers in certain areas face a higher risk of crop loss on account of weather conditions.

One of the ways to promote a farm revolution and overcome the challenges faced by primary producers among small and marginal farmers is to design a livelihood and development strategy that entails collectivising and strengthening them through Food Producer Organisations (FPOs) and integrating them into an inclusive value chain. It offers end-to-end support to small farm holders. These mutual aid organisations, whose members pool their expertise and part of their savings, become self-propagating in course of time.

As the value chain stabilises, it could be upgraded to have a more-complete ecosystem of private and public-sector actors at every link in the value chain. Throughout this process, it is necessary for the farmers and FPOs to create an improved ecosystem in which secure, independent livelihoods become attainable for marginalised small farmers.

The underlying principle that the value chain follows is similar to that of the full stack approach. This approach makes the sponsor responsible for every part of the experience. Uber, for example, handles everything from connecting people with a driver to managing payment and ratings. In the context of agriculture, the full stack approach includes helping farmers identify what to grow and how to grow it, what technology to use and when and where to sell at what price.

While farmers continue to work out strategies to keep their age-old bond with their land alive, the new generation finds farming unsustainable. This is the key reason behind its influx to cities despite the hard truth that the new utopian world the migrants hope to discover is a mere chimera. India needs to arrest this influx and inject the rural economy with new skill development programmes to generate local employment. That is the right way of saving both the cities and villages.

(Writer: Moin Qazi; Courtesy: The Pioneer)

As suicides continue unabated, India needs fresh strategies for mitigating risk, enhancing productivity, income and strengthening market linkages for businesses and cultivators

Farmer suicides continue to plague the country. According to the latest data released by the National Crime Records Bureau (NCRB), 10,349 farmers committed suicide in 2018, which is only marginally less than the figures for 2016 when 11,379 cultivators took the extreme step. The figures for 2017 have been withheld in the report. Maharashtra leads the suicide list (17,972) followed by Tamil Nadu (13,896), West Bengal (13,255), Madhya Pradesh (11,775) and Karnataka (11,561).

Large swathes of cotton farms in central India have been the epicentre of a debt crisis that has gripped the rural population. For years now, this crisis has driven thousands of farmers to take their own lives. These suicides are not merely a loss of human lives, they are debilitating scars on our nation’s development canvas. While debates continue to rage on reforming the agricultural sector to improve the economic conditions of the growers, there has not been any attempt to focus on the possible psychological problems arising out of economic stress that may be leading to these actions.

For every cultivator who takes his own life, a family is hounded by the debt he leaves behind, typically resulting in children dropping out of school to become farm hands. Farmers’ suicides have to be tackled on several fronts and addressing mental health problems is just one of them but it is certainly a major part of the solution.

The lack of focus on marginal and sub-marginal farmers, tenants, sharecroppers, oral lessees and non-cultivator households has further compounded the agricultural conundrum. We need fresh thinking on strategies for mitigating risk, enhancing productivity and income and strengthening market linkages for businesses and farmers for better profits. Simplifying mortgage requirements and procedures, rationalising stamp duty for loans to small and marginal farmers and providing agricultural and business extension services in the farm and non-farm sectors respectively can go a long way towards providing resilience to the agricultural community.

Economic reforms and the opening of agriculture to the global market over the last two decades have made small farmers vulnerable to unusual changes and fluctuations. Small growers now have to compete with larger ones, who are well-endowed with capital, irrigation facilities and supplementary businesses to buffer them against any shocks. As a fallout, peasants are facing what has been called a “scissors crisis”, which is driven by the rising cost of inputs without a commensurate increase in output price.

Peasants take loans from moneylenders at exorbitant rates of interest in order to buy expensive transgenic seeds and high-cost fertilisers that allow them to merely feed themselves and their cattle. They hope for better yields in the future but this time never quite comes. Eventually, many farmers find themselves in a debt trap as they keep pursuing the vain mirage of a golden crop bonanza. Owing more than they earn, the steadiest of these workers have become gamblers at the highest of stakes, betting their land and their lives on a better crop. As debt mounts, many growers are now making a permanent escape from the physical and emotional pain by ingesting deadly pesticides.

There is an inextricable link between small holder farmers and the health of our planet, just as there’s a link between us and these small holder cultivators. They play a highly critical role in protecting the environment. Many small holder growers lack the resources they need to sustainably cultivate high-yielding, nutritious and marketable crops. The pressure to feed their families and sell their crops to pay off other debts means the soil is often overworked.

These cultivators have to be taught smart agriculture practices, like harvesting rainwater, using organic fertilisers and undertaking intercropping to preserve their soil. They must have access to more resources like small farm loans, real-time weather and pest updates. Information on accurate market prices for their crops can help them make the most of their farms all year-round.

Despite their vast numbers, small farmers are not a solidified group and have not developed their negotiating power. Social divisions among the rural population have been the main reason why rural voters have failed to push for policies that boost their incomes. The large size of this population and its heterogeneity limit its influence on public policy. Farmers’ refusal to give precedence to their economic interests over their other ethnic and caste loyalties have limited their influence over public policies.

The Government needs to revamp its services so that growers have access to the latest technology and field practices. Agricultural universities must be involved in creating tailored educational programmes that serve the diverse needs of the rural population. Peasants need to learn how to work with limited land in a productive and environmentally friendly way. They do not only need better plant species but also up-to-date guidance on how to grow them. They do not need high-tech tractors controlled by satellites but they do need access to regional databases that provide information on soil quality. They also need access to affordable capital so that they no longer pile up unmanageable debt loads.

Loan waivers are both “bad politics” and “bad economics.” Indebtedness is the most acute problem faced by small and marginal farmers. However, their borrowings are primarily from moneylenders and hence a loan waiver is not going to make any sense for them. It is the richer farmers who are the real beneficiaries of such populist policies.

The problems faced by small farmers are complex and require a ruthless political will to address them. Their landholdings are below the economically viable threshold — the result is the cyclical appearance of bad loans and poor rainfall. Loan waivers have little to do with ending the conditions that lead to such problems.

Debt relief programmes fail to provide assistance to landless farmers, who do not have access to bank loans and some other growers, who depend on money-lenders. The write-offs are a disincentive to the banking system because people have expectations of future waivers as well.

The borrowers see value in strategic defaults. While it is important for banks to make credit available to farmers so that they can leverage and do better, it is also important to maintain credit discipline.

Loan waiver schemes vitiate the credit culture and make it tougher for banks to continue lending to these segments. They create moral hazards in the financial system by rewarding those farmers who default on their loans, offering nothing to those who pay. They do not take into account the loans growers have taken from the informal sector. There is also no distinction between voluntary and involuntary defaults, so it actually rewards those that have willfully defaulted. Additionally, the scheme does not take into account climatic conditions and fertility of soil. Farmers in certain areas face a higher risk of crop loss on account of weather conditions.

One of the ways to promote a farm revolution and overcome the challenges faced by primary producers among small and marginal farmers is to design a livelihood and development strategy that entails collectivising and strengthening them through Food Producer Organisations (FPOs) and integrating them into an inclusive value chain. It offers end-to-end support to small farm holders. These mutual aid organisations, whose members pool their expertise and part of their savings, become self-propagating in course of time.

As the value chain stabilises, it could be upgraded to have a more-complete ecosystem of private and public-sector actors at every link in the value chain. Throughout this process, it is necessary for the farmers and FPOs to create an improved ecosystem in which secure, independent livelihoods become attainable for marginalised small farmers.

The underlying principle that the value chain follows is similar to that of the full stack approach. This approach makes the sponsor responsible for every part of the experience. Uber, for example, handles everything from connecting people with a driver to managing payment and ratings. In the context of agriculture, the full stack approach includes helping farmers identify what to grow and how to grow it, what technology to use and when and where to sell at what price.

While farmers continue to work out strategies to keep their age-old bond with their land alive, the new generation finds farming unsustainable. This is the key reason behind its influx to cities despite the hard truth that the new utopian world the migrants hope to discover is a mere chimera. India needs to arrest this influx and inject the rural economy with new skill development programmes to generate local employment. That is the right way of saving both the cities and villages.

(Writer: Moin Qazi; Courtesy: The Pioneer)