Is Indian farmers' debt the real cause of the “recent surge” in farmer suicides over the years?

February 15, 2019

A vast majority of the lower middle class is directly dependent on agriculture for jobs. This is seen in the fact that it employs more than 40% of the total workforce, despite its shrinking contribution to the country’s GDP. Henceforth, it’s sad to see suicides become a common site amongst farmers but, unfortunately, this has been the case for years. Since 1995, at least 300,000 farmers have fallen victim to the harsh and unjust hands of this unforgiving environment.

Many of which are said to have been in debt with a staggering static from 2015 showing that nearly 52% of farmers nationwide are in debt; restricting that domain to the southern region of the nation increases that figure to over 80%. And now that it’s the election time, the chirps of the poor farming class over the unfair treatment have magnified tenfold.

 

This has caused the unchecked flow of money with opposing parties in a constant battle to out waive more and more outlandish amounts of loans in order to purchase voter loyalty. For instance, Congress (a pollical party), which won the very recent elections in Madhya Pradesh, has pledged to waive up to $5.3 Billion in farmer debts in the state. Moreover, even celebrities such as Amitabh Bachchan, who holds affiliations with Congress, has agreed to “personally” pay off farmers' loans of worth $500,000.

 

With many (politicians and journalists) already convinced that farmer debt is the sole cause for an alarming rise in farmer deaths due to biased media portrayal, let’s take a deeper dive into the numbers to dig into the roots of the issues in rural households.

 

According to India’s National Crime Records Bureau, over recent years, the number of farmer suicides has actually been falling in recent years. In 2016, fewer such deaths were recorded than at any point over the past 16 years. Moreover, nearly twice as many Indian housewives commit suicide than farmers.

 

Furthermore, there also seems to be a lack of a clear correlation between farmer suicides and poverty. In fact, comparatively wealthier states such as Maharashtra and Andhra Pradesh experience higher rates of suicide mortality than in the poorer states of Bihar and Uttar Pradesh. Calculating the incidence of indebtedness (the percentage of households that owe money) shows us that poorer farmers tend to be more indebted and have a higher debt-to-asset ratio than richer farmers, making them less capable of paying off their loans. However, despite these facts, according to data collected by National Sample Survey Office, around 90 percent of the farmers who committed suicide in Maharashtra, which ranks 1st in GSDP (Gross State Domestic Product) ranking in India, owned more than two acres of land and 6 out of 10 owned greater than four acres.

 

This contradicts the belief of impoverished farmers that are oppressed into labour in order to pay off loans from immoral lenders. This trope is omnipresent across all of Indian culture. The very purpose of subsidized government credit schemes that the government has been running for decades is centred around this very fact and is meant to provide an affordable alternative to the unreasonably high interest rates. Bihar stands once again as an example of proof against, as a state which allows for moneylenders to have great influence over dealings but still experiences significantly fewer suicides. Whilst, in rich yet high-suicide Maharashtra, formal loans account for 87% of total outstanding debt (exceeding the 57% national average).

Generally speaking, on an overall basis, the Indian farmers are coping much better than public conjectures. One measure of there standards of living is to look at expenditure which they presently account for 45% of the rapidly-growing consumer goods sector in India. This figure is remarkable considering the vast income inequality across the urban and rural landscapes. This implies that enhancements in “rural infrastructure, connectivity and digitalization” are resulting in higher demand. Moreover, over the past 3 years, rural sales have grown at a significantly greater rate than the urban sales and consumption rates has come to stand at a firm 9.7%.

 

As evident from above analysis, the wildly-believed myth of extent of indebtedness being the salient cause for farmer deaths has been debunked and so is the whole issue of excessive farmer deaths. But this is not to say that there is no cause for concern in this field nor to completely alleviate the blame of off indebtedness entirely; it is rather to comprehend that there is not the one sole cause, it is the concoction of a host of distinct yet entangling and overlapping causes.

Although, indebtedness is an increasing cause for farmer suicides, most suicide causes are quoted to be down to “family problems” (which could arise from their grim situation exacerbated by debts) and “illnesses”. The latter lacks the attention it deserves. Access to healthcare, as well as to rural infrastructure, plays not only their physical but also mental health; giving that sense of security and reassurance of safety.

 

Poor storage facilities and capacity are another cause, that result in fruits and vegetables to perish very quickly.  Unless storage quantity and quality improve, a bumper crop can prove catastrophic for farmers.

 

Furthermore, there is an impending dilemma that the farmers face incessantly. If the rains are good, the market is flooded with an excess supply resulting in a sharp decline in the prices. Framers try to hold on to crops but, due to lack of storage, they are eventually forced into distressed selling. To counteract these low market prices, for decades, there are set minimum prices for the agricultural products. But there is a lack of awareness amongst farmers over the presence of this rule and the exact minimum values. Questions over complete and proper implementation still loom. Furthermore, this is only present for major agricultural products and many products like onions don’t have a set minimum price.

 

Other causes include, droughts and the depletion of the water table that lead to declining productivity and a lack of modernisation.

 

But one thing is for certain, the loan waivers aren’t the panacea to they are made out to be by the politicians and media alike, who lack “fiscal instinct”. The deleterious impact on credit discipline and the massive hole they punch into state budgets, should mean politicians should consider rethinking their policies.

 

 

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