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Mainstream, VOL LIII No 37 New Delhi September 5, 2015

Farmers’ Suicides, Rural Distress and a Dying Nation

Saturday 5 September 2015, by Kobad Ghandy


The following is the latest article written by Kobad Ghandy, the noted Marxist-Maoist thinker, now lodged in Tihar Jail 3, last month and sent to us for publication in Mainstream.

The lives of the superstars, which preoccupy our media, is not the real India. It is the Black (market) India used to seduce the middle classes into a make-believe world, living the fantasy of an unreal hope. Crumbs and discards from the super-rich table, lapped up by a gullible section, plus the mythical glory of the past, drowns the ground reality of death, starvation, filth and disease that stalks our land.

Though the recent Socio-Economic Caste Census (SECC) touched on the horrors of rural India, after a day or two of reporting it was drowned out by news of scam after scam, on which nothing ever really happens—political shadow-boxing.

The real India comprises the three lakh farmer suicides—46 per day, one every half-hour. And for every farmer who commits suicide there would be at least a lakh more in a similar condition, who have not yet taken the ultimate step—the living dead, deep in debt. Of course, these are not the poorest of the poor; those are the crores of agricultural labourers—they rarely commit suicide as they are habituated to a life of starvation; they only die like fleas of minor diseases, malnutrition, hunger, destitution etc. The farmer had seen better days, but years of agrarian havoc—crop loss, ecological destruction, pricing loot, loot by trader/money lender/banks etc.—with debts piling up, and with no hope for the future, has pushed him to suicide.

The hanging of Gajendra Singh Rathore (G.S.R.) in March this year, in full view of thousands, at New Delhi’s Jantar Mantar, brought to the fore the issue, which, till then, had been largely ignored by the mainline media and politicians. The incident shocked the nation—but it also brought out the callousness of the media and hypocrisy of the political class. At a time farmers were committing suicide all over the countryside due to crop destruction by unseasonal rains, instead of taking the incident as a symbol of a deeper malaise, there were only attempts to desensitise the public through the propagation of conspiracy theories. And while hundreds of others who were dying at that time were ignored, there was competitive compensation being given to the G.S.R. family, in a mock show of concern.

In reality the pain felt by G.S.R.’s children and wife was of little concern to these vultures who descended upon the G.S.R. househoold, preying politics and TRPs off the dead man’s flesh. The agony of this family, as with lakhs of others, would be unbearable at the double loss—first the crop, then the head of the family and chief bread-winner—but that gets little attention, let alone compensation.

Give compensation? Why waste a few thous-ands on a dying entity?—that is the logic of economic reforms. Give crores to the poor business magnates to write off their NPAs (bad debts)—that is sound (reform) economics. Perish your pathetic peasant, you belong to the past; squander crores, you extravagant tycoon, you belong to the future—the market god. So goes the logic of the US-educated economists dictating our economy. On August 10, 2015, 25,000 farmers of Mathura have sought permission from the President to commit mass suicide. They have been demanding compensation for the 700 acres seized forcibly in 1998 for the construction of the Gokul Barrage. But neither the Centre nor the State are bothered!! Independence obviously means little to them.

But the issue is not merely compensation to the dead (or living) farmers’ families (anyhow much of it would get sucked away by the moneylenders/banks). The real question is: why have such suicides of farmers begun taking place since the past two decades (coincidentally a few years after the launch of economic reforms), when earlier few such incidents were reported? What is the root cause of this gigantic rural distress, and where lies the remedy?

After all, if there are no good days for the bulk of this vast population of 18 crore households (73 per cent of our people) who reside in the rural areas,1 there can be no happy days for our country. According to this latest socio-economic census, of this vast populace, 60.6 per cent (or 11 crore households)—that is, roughly 60 crore people—are categorised as “deprived households”.2 That is the largest mass of acutely impoverished people in the world!! What an excellent gift to our people, 68 years after independence!

Since our rural population comprises the majority of our people, any development that bypasses them would be meaningless. Develop-ment does not merely mean roads, rails etc.—it means primarily development of our people and their land (jal, jungle, zameen). Did not the British too build roads, rails etc. (in fact far more than independent India), but they ruined our country so badly that after nearly two centuries of rule 30 lakh people perished in the Bengal famine of 1943? Is this the model of ‘development’ we seek? We seem to be heading in that direction!!!

In this article let us try and seek the root cause for this tragedy facing our nation, and where lies the solution. For, it is only through a solution to our rural problem—where the bulk of our land and people exist—that the problems of the country can begin to be solved. It is wishful thinking to assume that progress can be achieved by building small islands of fortune within a vast sea of misery.

In this article we shall first look at the extent of rural distress, then view the types of relief/compensation being doled out; then we shall look at the root causes for the problem, and finally turn to possible solutions.

A. Extent of Rural Distress

According to the SECC census (2011), released in early July 2015, India has a total of 24.4 crore households of which 17.9 crores live in the rural areas and 6.5 crores are urban. This translates roughly into a population of 90 crores bring rural (73 per cent) and 32 crores being urban (27 per cent). In this article we are concerned with only the rural sector of the population. The data is devastating.3

Of these total rural households, 56 per cent or 10 crore households are landless—that is, roughly a population of 50 crore people in rural India own no land. And of the total households, 51 per cent (that is, around nine crores) live off casual manual labour. In other words, of the 10 crore households that own no land, 90 per cent or nine crore live off casual manual labour (that is, are agricultural labourers, and a large part of migrant labour working on construction and other sites), while 10 per cent or one crore households may be involved in business, trade etc.

It is this fortyfive crore population who comprise the poorest of the poor in our country, a large percentage of whom come from the Scheduled Castes (SCs) and Scheduled Tribes (STs). In other words, this vast section of our people face not only excruciating levels of poverty, but also social oppression, which, for the SCs, can often be more humiliating than poverty.

Now, if we turn to the cultivators or farmers, they comprise 30 per cent or 5.4 crore of the rural households (roughly a population of 27 crores). It is from these farmer housholds that people are committing suicide.

According to a study,4 75 per cent of all these farmers (that is, four crore households) are marginal farmers who own up to one hectare (2.5 acres) of land. According to this study, their average monthly income goes up to a mere Rs 5247. After taking account of their monthly expenditure, these farmers have a net deficit of up to Rs 1500—that is, a yearly deficit of Rs 18,000. They have to make up this gap through casual labour, whether agricultural, NREGA or seasonal migration. They also have to borrow from the moneylender/trader at exorbitant rates of interest. Their plight is not much better than those of the agricultural labourers.

Then again of the total farmer households, 10 per cent have one-to-two hectares (up to five acres) of land—that is, 50 lakh households are small farmers who too live virtually on the brink. According to the same study, they have a net surplus (saving) of up to Rs 469 per month (income minus expenditure). In other words, this section of farmers too live in a precarious condition and any slight crop destruction, crop-pricing disturbance or some disease in the family will push them into debt.

In other words, one can say of the 5.4 crore farmer households, as much as 85 per cent or 4.5 crore households are in dire straits and it is from amongst these that the bulk of the suicides would be taking place.

Actually, even farmers above five acres often face acute distress due to drought/unseasonal rainfall/thunderstorms or due to some major disease in the family. It is only the big farmers with over 10 hectares (25 acres) who are reasonably well off. But these comprise a mere 0.24 per cent (or just 2.4 lakh farmer households), whose monthly surplus from farming amounts to Rs 20,000 per month. It is this microscopic elite from amongst these (like the Badals of Punjab) who own hundreds, nay, often thousands, of acres, who tend to dominate the countryside.

It is the acute distress (for reasons that will be elaborated in section C) amongst the 4.5 crore farmer households that have been pushed into a situation without any hope of improvement, who live on the brink with all roads to a better future closed, are pushed over the precipice. They are pushed over the brink with either a sudden drop in farm income or a sudden major expenditure mainly due to disease.

It would be necessary in this section to consider this fact of health expenditure, as it is no longer a minor factor, but one of the major causes of distress. This situation is particularly aggravated by the government’s pathetically poor expenditure on health allowing the drug companies and healthcare empires to fleece the people. Disease is such a thing that a family begs, borrows, or does anything to save a member of their household. This vulnerability is utilised by the sharks of the drug/healthcare industry to mint super profits.

According to the Ministry of Health,5 over 6.5 crore people are pushed into poverty every year because of expenditure on healthcare. This is a gigantic number of people to be impoverished—that too every year. According to the same study, nearly 18 per cent of all households (4.3 crores) in 2011-12 faced catastrophic expenditure because of health costs compared to 15 per cent in 2004-05. The reason for this is not merely poverty, but also increasingly high levels of pollution (of air, food, water etc.) due to massive ecological destruction.

The model of development adopted by successive governments is leaving an entire nation sick. Pollution, lack of sanitary hygiene, filth in every nook and corner has resulted in not only the largest number of sick in the world ranging from the infectious (many countries have wiped these out) to the life-style diseases. Added to all this is that 52 per cent of Indian households face severe malnutrition.

This, combined with high pollution and poor hygiene, give an explosive situation in the country in general, in the rural areas in particular. As a result, 16 lakh children (under five) die every year,6 1000 TB deaths every day,7 and five lakh deaths each year due to water-borne diseases.8 And this would be only the tip of the iceberg.

If one looks at the nutrition conditions of our people, the protein intake has actually dropped by 10 per cent in the past two decades of economic reforms and now 80 per cent of our rural population get less than the minimum necessary.9 It has dropped from 60.2 gms per day in 1993-94 to 55.7 gms per day in 2011-12. Productivity losses due to poor nutrition suck up over 10 per cent of a family’s lifetime earnings and as much as two-to-three per cent of the GDP.

And while the poor and middle classes beg, borrow and mortgage their entire wealth/savings, the leeches of the drug/healthcare industry have become the top billionaires of our country. Virtually dracula-like sucking the blood of the Indian people, out of the 145 billionaires in India the maximum (27) are in the pharmaceutical and healthcare sectors (with real estate coming second at 23). This has been facilitated by the government’s pathetically low expenditure on healthcare—while in most countries government expenditure on health-care on every individual varies from 85 per cent in Japan and the UK to 50 per cent in China, in India it is a mere 30 per cent.

While the above figures are for the entire country, the rural poor will be the worst hit as they have the least access to government facilities and maximum malnutrition.

So the rural poor in general and the cultivator in particular are squeezed doubly—poor incomes from agriculture and high cost of medical treatment (not to mention the average rise in consumer inflation).

B. Government Relief/Compensation

The July 14, 2015 issue of The Times of India reported that seven farmers from Maharashtra’s Wardha district (of Gandhi Ashram fame) had sought the administration’s “permission” to commit suicide. As per government norms, the farmers are entitled to the measly sum of around Rs 4000 per head for crop losses suffered due to hailstorms, droughts, and floods last year. Even this minor amount was not being cleared by the district authorities and was lying locked up in banks since the past six months, Continuous appeals for release of the amount has fallen on deaf ears, forcing the farmers to take this desperate step.

On the same day it was reported that 50 farmers had committed suicide in Karnataka in the past two months. More recently, it was reported that already 1300 farmers had committed suicide this year in Maharashtra.

Nowhere are either State governments or the Central Government bothered about the fate of farmers’ suicides. What a farmer requires after a loss is immediate relief, not lengthy assurances. This could easily be given forthwith by the MP of the area who gets Rs 2 crores annually. But, never has there been a single report of even a paisa being given. These huge funds are unaccounted for with no audits or controls. Yet these suicides have been going on for over 15 years unabated. In 2014-15 the numbers have sky-rocketed due to both drought and uneasonal rain. This growing number of farmers’ suicides over such a long period is itself an indication of the lack of interest of any of the governments. The recent incident at Wardha is just as example of the level of callousness towards those who produce the food we eat.

Let us look at examples in a few States:

Maharashtra, the wealthiest State in India, has been the headquarters of farmers’ suicides through this entire one-and-a-half decade. This is ironical as the Union Agricultural Minister for an entire decade of this period was from Maharashtra. And within Maharashtra it is the cotton belt of Vidarbha that has been the major centre of such suicides. Lately, farmers’ suicide has also spread to the neighbouring Marathwada region which witnessed 500 suicides in the latter half of 2014. The BJP Government has discovered a trick to bring down suicides—just don’t report them. But even of the official 601 farmer deaths [the actual figure would be over 4000, as in the previous year it was 3146] in 2014-15, the Maharashtra Government only found 141 fit for compensation. And whether the aggrieved actually received it is not known.

Take another example—UP, which saw a large number of suicides due to unseasonal rains and hailstorms this March-April. The government accepted in Parliament that a massive 189 lakh hectares of the rabi crop (wheat, mustard etc. as also mangos) were damaged, of which 94 lakh hectares were in UP alone. Besides, UP is the largest sugarcane growing State in the country. The sugar mills (privately owned) have not paid the farmers for years, and, as a result, every sugarcane farmer is reeling under a debt of an average of Rs 8 lakhs. Neither the State nor the Central Government does anything about the farmers’ plight. The UP Government can spend crores on entertainment/dance programmes but cannot spare a paisa for the distressed farmer. Instead they beg the Centre for funds. In March 2014 the UP Government sought relief of Rs 365 crores from the Centre. This was sanctioned in January 2015, by which time many farmers had committed suicide. Hardly had this reached the UP that massive storms destroyed crops worth Rs 745 crores. The Mathura district itself witnessed 46 farmer suicides this rabi season; Meerut even more. Yet the CM said there were no suicides. On April 6, the day when 24 farmers committed suicide in UP, the Chief Secretary, Alok Ranjan, said: “There is no conclusive proof that suicides are linked to the unseasonal rains.” Such is the level of government insensitivity.

Let us take one last example of Rajasthan, the State from which Gajendra Singh Rathore (of the Jantar Mantar fame) hailed. There the government itself announced a damage of 46 lakh hectares of this year’s rabi crop. In a show of concern, it reduced from 50 per cent to 25 per cent of crop damage as the criteria of compensation. But when it came to assessment, farmers reported that local patwaris gave assessments of 20 per cent so that none would be liable for compensation. The government could spend hundreds of crores on a foreign investors’ mela, but resorted to deceit to not give farmers their due. Let alone that, though the government announced an MSP, when the farmers went to sell their badly damaged crop at the mandi, they were told that with the FCI norms being so strict, even with concessions their crop did not meet the criteria. Result: distress sales in the open market.

And so the list of States stabbing their own farmers in the back could go on and on. In Punjab farmers had demanded Rs 770 crores as compensation for crop damage; the government did not respond with even a paisa. In Delhi the government announced Rs 20,000 per acre compensation; months later farmers complained that the process of assessment had barely started.

This approach of the various governments can well be understood when we view the mindset of the policy-makers and economic ‘experts’. Agro-economist Swaminathan Anklesaria Aiyer wrote recently that farmers’ suicide is a psychological problem, not an economic one, and it is part of an international phenomena. Why, may we ask, has this started soon after the introduction of the policy of economic reforms, and that of Bt cotton in Vidarbha? Another economist, Manish Sabharwal,10 first did a lot of statistical jugglery to show that the number of suicides is in fact insignificant; then he went on to add: “The best way to help farmers, is to have less of them.”

Finally, the Haryana Agricultural Minister (who had for many years been the President of the BJP’s All India Kisan Morcha) takes the cake. In the midst of the March-April crisis he called the farmers’ suicide a “cowardly” and “criminal” act!! No doubt the death puts the wife and children in a worse condition; but in spite of this the humiliation of not being able to care for them, and the total desperation and lack of hope in the future forces him to take this, no doubt, irrational step. Of course, rationality may come easily to the onlookers, not the one who actually suffers—particularly when they see no way out even in the future. The real criminals are the Monsantos and the policy-makers who bring in these vampires.

Rather than get to the root cause of the problem, successive governments have but a single solution—crop insurance schemes. Besides being a total failure this only deals with crop damages, not issues like pricing, diseases etc. which could be even more devastating.

To give an example how this insurance scheme works, let us look at Haryana since for the past two years they have been implementing a national agricultural insurance scheme that made buying an insurance (from one of the 11 private companies) mandatory for farmers taking a crop loan. By this, in case of crop damage, they were entitled to a compensation of a mere 40 per cent of input costs. So this would only cover a fraction of the input costs, let alone the loss incurred by damage/loss of the crop. Farmers say that even these meagre claims were never honoured—as, first, the damage was assessed tehsil-wise (that is, only if the entire tehsil was affected would a farmer get compensation), making it irrelevant; then it was reduced to a cluster of villages; finally to a village. This shows the Tughlaqian schemes they introduce, with the obvious intention of not paying up anything, but taking the insurance money. After much red tape is cut and they do manage the 40 per cent—this would not even be sufficient to cover the crop loan. Besides, the Haryana Government never paid their share of the premium and owed the insuracne companies Rs 36 crores. Farmers see this insurance scheme as a big waste of money, forcibly extracted from them, with little or no returns.

Yet, the BJP Government has not only continued the UPA’s insurance policy, but extended it to two major insurance schemes—the PMJDY (Pradhan Mantri Jan Dhan Yojana) which is through the PSU banks; and the PMSBY (Pradhan Mantri Suraksha Bima Yojana) which involves the private sector insurance companies. The latter is gearing to sell 30 crore policies!!!

Similar experience with the insurance schemes have been reported from Maharashtra and other places as well. When the farmer faces losses what he needs is immediate compensation, not some complicated insurance scheme which he does not understand. If the government can write-off a massive Rs 45,000 crores due in tax (MAT —Minimum Alternative Tax), due by foreign investors on the super-profits made through speculation in India, why cannot they grant a few lakhs to the starving farmer? If the govern-ment can restructure bad debts (euphemistically called non-performing assets or NPAs) of lakhs of crores to the PSU banks, why can these same banks not write-off the few crore rupees of debts due by farmers? (The PSU banks are the first to grab the compensation money received by the farmers’ families.) And if this was not enough, the government forgoes over Rs 5 lakh crores to the big corporates—that is, to the more than 400 to 500 families who live five-star lives; but it cannot consider the lakhs of starving farmers!!! The government does little about retrieving the huge debt of Rs 60,000 crores ($ 10 billion) of the JP Group—after all, he is a favourite of the Modi Government as he built the controversial Sardar Sarovar Dam—but will not spare the farmer his small debt.

Of late the Central Government has evolved a novel method of dealing with farmers’ suicides—pretending they dot exist. While the data indicate that farmers’ suicides skyrocketed by 40 per cent in the last financial year (due to a double hit—drought in the kharif season and hailstorms in the rabi season), the government says farmers’ suicides have more than halved, to a mere 5650!!! The Agriculture Minister went to the extent of saying that the bulk of the others are due to love affairs.

C. Root Causes of Rural Distress

The root causes of rural distress can be directly linked to the lack of land reforms and anti-farmer government policy. We have already seen at the very start how a microscopic population has cornered land above 25 acres. India had one of the richest agricultural lands in the world and sufficient for a large part of the rural populace. But with it cornered in the hands of a few (of late including realtors, industrial/mining loboies, power-brokers and speculators), and with the increasing parcelisation/ fragmentation of land, most of the rural populace suffer.

In this article we shall focus on the anti-rural/pro-corporate policies of the governments, as reflected in three spheres:

[[<> (1) Budgeting allocations—or Big Business bias; (2) in the sphere of pricing—or the Bharat versus India syndrome; and (3) in the sphere of ecology—or the smart-city syndrome.

In essence it is the step-motherly treatment meted out to the agrarian economy right since 1947 coupled with US-dictated destructive schemes (Green Revolution, Genetic revolution etc.) which have led to its present state of collapse. Let us now view the policies in these three major spheres:

1. Budgetary Allocation—Big Business bias

In a country dependent on monsoon—that is, seasonal rainfall—a key factor of agricultural planning should have been schemes to preserve the precipitation in those few months and projects to take this water to the fields. But till today 65 per cent of our farming is dependent on nature with no irrigation. Of the 35 per cent irrigated land a mere 17 per cent is through public government schemes, while the bulk is through private borewells.

For the 65 per cent who depend on nature, agriculture is a pure gamble depending on whether the rain falls at the right time (and in the correct quantum) or not. And due to ecological devastation rainfall has become terribly erratic (either too much or too little, or at the wrong time) causing havoc to the farmer. So, those who can afford it, resort to the borewell. While this creates a big market for pump-set manufacturers, it is biased in favour of the big farmers. Worst still, it depletes the underground water acquifiers. This devastation can be seen in Punjab—the land of five rivers.

In spite of these poor conditions, the already pathetic expenditure of the Union Government on irrigation of Rs 4630 crores in 2013-14 has been savagely cut in the present Budget (2015-16) to a mere Rs 1000 crores.11 In addition, the government has also the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) for which Rs 1000 crores has been allocated in this Budget as well as the last. But, as in the last Budget Rs 4 crores was spent, one can expect this amount to be just a paper figure.

The overall budgetary allocations for agriculture have been slashed drastically—and this after a year in which the BJP Government spent 26 per cent less than what it had allocated in its first Budget on agriculture, irrigation and flood control. Compared to 2013-14, the actual spending by the Central Government and transfer to the States are currently budgeted to decline by 33 per cent.12

Compare the figures doled out to agriculture, which supports two-thirds of our people, to that given for urban projects and big corporates. And even in the urban areas with the vast majority living in slums and one-room tenements, it is only a small fraction who enjoy the benefits of the smart-city syndrome.

In the current Budget the total outlay on agriculture has been slashed to a mere Rs 28,050 crores, that for crop husbandry to Rs 40,000 crores and that for animal husbandry has been halved to Rs 330 crores. For a second successive year flagship schemes in agriculture received meagre allocation: Rs 200 crores for the soil health card scheme, Rs 1000 crores for the PMKSY, Rs 1800 crores for minor irrigation and Rs 1500 crores for watershed management. As we have already seen, much of this is unlikely to get spent. Also allocation for the MGNREGA, that is a support to the poorest of the poor, has dropped from Rs 40,000 crores in 2009-10 to Rs 33,000 crores in 2014-15, without any increase in the current Budget.

On the other hand, the government has allocated Rs 38,000 crores for national highways, Rs 50,000 crores every year for developing smart cities, Rs 48,000 crores every year for the Atal Mission for Rejuvenation and Urban Transformation, and has just announced a proposal of Rs 1 lakh crores for a single bullet train from Mumbai to Ahmedabad. No doubt Indian cities are some of the filthiest and most unorganised in the world, but seeing the levels of corruption in India, these huge expenditures will primarily be a bonanza for the construction and real-estate lobbies.

No doubt India needs development in all spheres (and maybe if the huge black economy is tapped there would be sufficient funds to go around), but it needs to get its priorities right, spend heavily on irrigation and agriculture to give sustainable living to our vast rural popu-lation, which in turn would boost the market for manufactured goods.

2. The Great Price Robbery: Bharat versus India Syndrome

The Green Revolution flourished in the decade of the 1970s, but by the 1980s it began to peter out, resulting in the huge farmers’ movements demanding remunerative price for their produce. The cause of this crisis was the growing gap between the price of inputs and that of the output. The price of HYV seeds, fertilisers etc. were first kept low to entice the farmer; once they got addicted, these were substantially raised, while the price of the agricultural output was increased disproportionately. This gave windfall profits to the industrialists (mostly foreign) while the farmer was squeezed. The movement coined the slogan ‘Bharat versus India’ where India represented the industries/cities and Bharat the farmer/rural people.

But this movement saw limited success and Bharat continued to be sucked dry by India. Suicides first began in the cotton belt of Punjab (Malwa region—infamous for its large cancer population) and began spreading to the rest of the country—mostly the cotton belts. With economic reforms being introduced in the early 1990s, this loot increased ten-fold and towards the late 1990s, the epidemic of suicides began—with the cotton belt of Vidarbha (Maharashtra) as its headquarters.

It must be remembered that the bulk of India’s big business houses—from Tata to Ambani—made their initial fortunes in the textile industry. To do so the governments made sure that the cotton prices would remain depressed.

Vidarbha, famous for its rich black cotton soil, has been turned into a veritable graveyard and till today tops the suicide list. It all began with the introduction of the Monsanto Bt-cotton seed. According to Vandana Shiva,13 cotton seed prices were pushed up 70,000 per cent with no commensurate increase in output due to lack of irrigation facilities. Recently, a farmers’ leader from the region, Vijay Jawandhia, in a letter to the Environment Minister, has said that the Bt cotton seed industry is a Rs 4000 crore business with enormous profits to Monsanto (a US conglomerate). These seeds cost the farmer Rs 4000 to Rs 5000 per acre while normal desi seeds cost barely Rs 200 per acre. Even worse, the Bt seed has to be purchased every year and cannot be recycled. In his letter he has suggested using the BNBt cotton, which can be re-used and is used in other countries like Pakistan. But the government has, so far, failed to respond.

This year the government announced an MSP (minimum support price) of cotton of just Rs 4050 per quintal (last year it was Rs 4000 per quintal); a huge decline from the Rs 7000 per quintal in 2011-12. Farmers say that the cost of production is itself Rs 5500 per quintal for a decent crop. But with repeated drought conditions they get barely five quintals per acre when normally they would get 25 quintals.

Farmers are the only producers in the country who are hit by both scarcity as well as bumper crops. When there is scarcity prices do not shoot up as with other commodities as the MSP is fixed (also traders cheat gullible farmers); when there is a bumper crop the prices crash so badly that farmers get wiped out. For example, this year farmers are committing suicide in West Bengal as there was a bumper potato crop and prices were next to nothing. Often prices drop so low that farmers prefer to plough their crop back into the soil rather than sell it.

On the other hand, the prices of pulses shot up a massive 40 per cent this last year due to drought. Also the prices of vegetables, particularly onions, have skyrockated. Here too the bulk of the benefit will go to the trader, the farmers suffer the drought.

In India, the prices of agricultural items which feed industry—like textiles, Pepsi etc.—as raw materials are generally depressed to enhance the profits of business. So, for example, the MSP of cotton is kept low. Pepsi contracts to purchase potato from farmers at Rs 0.20 per kg, while the consumer pays Rs 200 per kg for its Lays chips.

Then with the government opening up the agrarian sector to derivatives trading and the international market, farmers are also hit by fluctuations internationally. So, for example, as long as the international demand for maize was good, the Bihar farmers did well for a few years. This year the prices crashed from Rs 1200 per quintal to Rs 800 per quintal. Doubly hit by unseasonal hailstorms, many farmers were pushed to debt and suicide.

In fact this year all international agricultural commodity prices have crashed by 26-30 per cent. Wheat prices fell by 33 per cent, maize by 29 per cent, soyabean by 33 per cent, cotton by 22 per cent, sugar by 25 per cent and skim milk by 43 per cent. As a result, according to the CMIE, prices in India too have dropped drastically in the last year (for the farmer; for the consumer, in fact, retail prices have shot up)—wheat from Rs 1645 per quintal in 2014 to Rs 1545 per quintal in 2015; cotton from Rs 5014 per quintal to Rs 4060 per quintal; rubber from Rs 14,151 per quintal to Rs 10,723 per quintal; basmati from Rs 4200 per quintal to Rs 2600 per quintal; soyabean from Rs 3700 per quintal to Rs 3100 per quintal.14 Input prices never drop!!!

In spite of these pricing problems, instead of protecting the farmer against such fluctuations, economists continue to recommend the oposite: decontrol of agricultural pricing. In fact the UPA Government, on the recommendation of the Rangarajan Committee (2012), decontrolled the pricing of sugar. But with increased sugar production, the price of sugarcane dropped this year to Rs 240 per quintal from Rs 320 per quintal last year. At the present price of sugarcane a farmer will incur a loss of at least Rs 15,000 per acre in the first year of planting. In the second year he will barely break even. Since the price of sugar has fallen from Rs 3600 per quintal in 2014 to Rs 2600 per quintal in 2015, mills are refusing to pay the farmers. Today there is a backlog of Rs 20,000 crores not paid to farmers by the mills throughout the country—with the governments doing nothing.

The goverment has just decided to bail out the banks by giving them Rs 75,000 crores (Rs 20,000 crores before September 2015) for losses suffered due to non-payment of corporate bad debts (NPAs). So they can bail out a handful of big companies, but are not willing to bail out lakhs of sugarcane farmers!

As far as pricing goes, the farmers are not only robbed through the Bharat versus India syndrome, but by their very own neighbourhood traders, arhatiyas etc. These leeches double up as moneylenders, input shop-owners and transporters. Once the crop is produced, they extend a vice-like grip crushing the simple farmer, like a python does its victim.

An example of this is to be seen at Lasalgaon (Nasik district, Maharashtra) which has the biggest agri-marketing centre in Asia (the produce is mostly onions). All agricultural commodities are sold through the APMC (Agricultural Produce Marketing Centre), 80 per cent of which is in cash. Farmers are paid a mere 70 to 75 per cent of the already depressed price, that too after eight to ten days—10 per cent is deducted for graduation, eight-to-10 per cent for weighing, loading etc. and seven per cent commission. Though the APMC Act (1963) says payment is to be made by cheque in 24 hours, no rules are followed. The type of money amassed from these starving farmers by these wholesale traders can be understood by one fact: Toyota did a promotional event in March this year in Lasalgaon—within eight hours it sold 70 SUVs—all to local traders.15

India has 305 APMCs, but only 10 per cent of agricultural produce is sold through them; the bulk is sold directly in the open market. If such is the loot at the APMCs, one can imagine what happens in direct sales, where payments are often made after two months. Ninety per cent of the cotton, soyabean, grapes, mangos etc. are sold direct. The extent of the loot by such middlemen can be understood by a WTO report of the late 1990s which said while consumers paid Rs 64,919 crores for the wheat purchased, the farmers received a mere Rs 26,322 crores.16 Today the situation would be even worse. Both farmers and consumers suffer—middlemen and government agents make a killing.

In spite of such a pathetic situation, this year the Centre issued a fatwa to State Governments not to give bonuses above the MSP rate—forcing governments like the one of Madhya Pradesh to cancel the Rs 150 bonus it has been giving to wheat farmers for many years—this, after Modi in his election campaign had assured farmers that they would be given an MSP which promised a 50 per cent return on their investment.

While such is the level of the loot of the farmer through the pricing of agricultural commodities, it does not end there. The Bharat versus India syndrome extends even more ruthlessly to the sphere of inputs where the seed, fertilisers, pesticides, tractor, pump-set etc. companies make gigantic profits through inflated prices. The seed companies are dominated by the multinationals, where the profits are the largest. All the major big corporates dominate the control of agricultural inputs.

Take the example of fertilisers. Prices have shot up from Rs 400 for 50 kgs to Rs 1100. Due to acute shortage of fertiliser production (urea imports have gone up from 57 million tonnes in 2008-09 to 88 million tonnes in 2014-15) and shortages in government stores, farmers have to pay as much as Rs 1500 to private traders in the black market.17 Imagine the callousness of the government—it pushes the Green Revolution making the farmers dependent on chemical fertilisers; then they cannot even produce sufficient fertilisers creating a black market in the product. In January this year Haryana witnessed a riot-like situation and urea had to be sold from police stations. In Bihar farmers looted trucks.

When such is the pathetic situation of farmers with a de facto reverse subsidy through price manipulations, the government is grudging to give even the meagre subsidy for food and fertilisers. For years the US-IMF-EU are demanding that the Indian governments cut their subsidies (derogatively called freebies) and the governments have been acting accordingly. But these same Western governments give gigantic subsidies to their own farmers. The double-standards are blatant!!!

So, for example, India’s subsidies of $ 12 billion to its 500 million farmers are considered by such elements as “trade distorting”, while US subsidies of $ 120 billion to its two million farmers are not! Indian subsidies are $ 25 per farmer (even this is notional due to pricing distortions), while US subsidies amount to $ 60,000 per farmer—that is, 2,40,000 per cent more.18

In Europe the figure is even higher. The Common Agricultural Programme (CAP) is fully funded by the EU. Out of its general budget, as much as 40 per cent of its annual budget is devoted to the CAP. In India it would not be even five per cent. And this, in a situation where Europe has a microscopic section of its population living off agriculture, while India has the bulk of its people!!

So what is necessary for the US-EU is unnecessary for India. Such huge subsidies to agriculture is necessary as the gap between the productivity in agriculture and that of industry is bound to remain, intact. The reason is that scientific development keeps increasing the productivity in industry, but for agriculture there is a limit and productivity increase is such more limited. If those huge subsidies were not there, food would get so expensive that society would collapse. But the Indian governments blindly follow the dictates of the West, and, in this case, are unwilling to ape them. So the Bharat versus India syndrome will continue where the price of agricultural produce will remain depressed while the cost of inputs will continue to rise. This will reach extreme levels as food, fertiliser and other subsidies are reduced!

Now, let us turn to the ecology, and witness how its destruction is causing havoc for the farmer.

3. Rape of the Ecology—Smart City Syndrome

What is called ‘natural disaster’ is more and more man-made. Farmers are being continually afflicted by drought, floods, unseasonal rainfall etc. This is primarily due to the model of development that destroys forests, usurps agricultural land, destroys the water-retention capacity of the soil and obstructs free-flow of rivers and natural lakes. The land mafia, real-estate developers, mining sharks with the collaboration of governments have been destroying everything they can set their eyes on, to mint fortunes. The devastation wrecked in Srinagar, Uttarakhand and other places is only the tip of the iceberg of ecological destruction.

Not only is India’s land being destroyed; so also is its water (rivers and underground acquifiers) as also the air. This rape of the ecology continues unabated no matter who is in power, and any restrictions on it is branded as anti-development. Yet, India loses $ 10 billion annually in natural disastars of which $ 7.4 billion is in floods alone.

There has been much debate about the Land Acquisition Bill, but even without this draconian Act environmental havoc has been continuing unabated. So, for example, the UPA Environment Minister, Jayanti Natarajan, had given consent to 1500 projects in two years, and the present BJP Government approved 750 public and private projects between June 2014 and January 2015. The desperation to pass the Land Acquisition Bill is to satiate the voracious appetite of the real estate and construction lobbies to seize land and put an end to the mass protests taking place in about a quarter of India’s districts—that is, there were 252 land conflicts spread over 165 districts in 2013-14, an increase of 40 per cent over 2012.19 It is estimated that projects worth Rs 6 lakh crores have been stalled due to land acquisition issues. Yet, 53,000 hectares of land acquired for SEZs several years ago are lying vacant.

According to the Sumitra Mahajan Committee,20 6.1 crore acres of land has been acquired by the state since 1947. Records show that between 1999 and 2013 India lost 10.6 million hectares of forest—that is, 15 per cent of our country’s total forest cover—in less than one-and-a-half decade.21 Forget the forests, rampant destruction of trees is to be seen in the very Capital city—in spite of a law against cutting trees. In Delhi one lakh trees were cut between 2006 and 2010, mostly by govern-ment bodies in the name of ‘development’. It is said this wood was sent free to crematoriums. Just this culture of cremation (not electric) is the source of enormous forest/tree destruction. One body takes 500 kg to burn. Every year a massive 50 million to 60 million trees are burned for cremations. Not only does this destroy our trees but the burning produces five lakh tonnes of ash and eight million tonnes of green-house (CO2).22

The government’s mania for land is totally incomprehensible as there are vast tracts of vacant land lying around unused all over the country. The Mahajan Committee Report brought out that in December 2014 the following lands were available: Maharashtra Government’s unallocated land of one lakh acres; GIDC (Gujarat) over 50,000 acres; Andhra Pradesh 73,000 acres; PSU companies have surplus land of 45 lakh acres; defence forces a surplus of 2.65 lakh acres; ports 2.58 lakh acres. And India has 40 million hectares of wasteland. Finally, of the 1.5 lakh acres acquired between 2006 and 2013 for 576 SEZs, till 2013 only 152 SEZs have become operational; the rest are lying unused.

Why does the government not seek to first use these lands lying with it or give these as compensation for those taken from farmers? There needs to be a total ban on seizure of forest and agricultural lands, and, on the contrary, there needs to be massive afforestation programmes on the 15 per cent denuded areas.

Another reason for drought and floods is the complete destruction of the organic matter in the top soil, due to the reckless use of chemical fertilisers and pesticides. According to Vandana Shiva’s book Soil, Not Oil, a mere one per cent increase in the soil’s organic matter can increase the soil’s water-holding capacity by 1 lakh litres per hectare. This, the book says, is our insurance against climate change, both when there is drought and when there is excess rain. On the other hand, cement and concrete increases the run-off of water, aggravating floods and droughts. Increasing soil retention will also help prevent depletion of our underground acquifiers.

As though this damage is not enough, even our rich water sources are being destroyed. India has one of the largest number of big rivers in the world. But all these have virtually been turned into glorified sewers. According to a parliamentary panel report,23 the country generates sewage of 57,233 million litres per day (MLD). Of this a mere 21,478 MLD goes through the Sewage Treatment Plants. In other words, every day 36,875 MLD of sewage lie untreated, the bulk of which flows into the rivers or sea.

Can one imagine that after nearly 70 years of independence our country is unable to even treat (let alone recycle) its waste, polluting our rivers and spreading diseases all over the country! In fact, a major cause of illness and death in the country is through polluted water. Every year five lakh children die due to water-borne diseases. In addition, the polluted water finds its way into our food-chain resulting in a spurt of diseases like cancer. Poor farmers do not have access to water purifiers and bottled water. But, the more the pollution of water, the bigger is the bottled water industry—selling at nearly the price of milk, giving crores of profits to the manufacturers.

The government has not only destroyed our surface water but also the underground acquifiers creating permanent damage to our land. Local irrigation schemes that got destroyed duirng British rule were never rebuilt in independent India. So, as already mentioned, till today a mere 17 per cent of our land is irrigated by public schemes (canals etc.). The government encourages individuals to dig borewells for irrigation. This promotes the pump-set industry. Not only does this policy favour the rich farmers, absolves the government of its responsibility, it results in permanent damage to the land. In places like Punjab the water table is dropping at the rate of one metre per year. In UP water riots have been taking place and in districts like Meerut, Agra, Muzaffarnagar, Ghaziabad etc. the water table is falling from 70 to 90 cms per year. Drinking water in at least 630 urban bodies of the country is supplied through groundwater. In other areas the water has turned saline, and in large parts of the country (like West Bengal) high levels of deadly arsenic, cadmium etc. have been found in most districts. One can just imagine the havoc this would cause to the health of the rural people.

So, we see that what they say are ‘natural calamities’—whether droughts, floods or, in fact, diseases—these are all man-made, the result of warped government policies.

The government is once again seeking to divert the issue by saying that farmers’ suicides are not just due to debt, but love affairs. However much the police/government records a death as a non-issue (to avoid giving compensation), rural distress is acute, the three main causes being lack of proper funding for rural development, the pricing-loot of the farmer and ecological destruction. Quite obviously, the way out of the quagmire will have to be found chiefly in these three spheres.

D. The Way Out

As we have seen, all the big powers in the world—the US, Europe, Japan—heavily subsidise/support agriculture. We ape the West in all the wrong things, but where we need to learn from them, we turn a blind eye. Forget about these big powers, consider today’s major power, China. One can learn a lot from China as there were many historical parallels of China with India and soon it will surpass the US as the Number One economic power in the world. Both countries got independence from colonial/semi-colonial rule about the same time. Both were extremely poor countries, backward with similar GDPs through the 1950s, 1960s, 1970s. China had the additional disadvantage of lack of fertile land and limited fresh water. Both had poor oil resources. Yet, today India’s economy and worldwide economic clout are insignificant compared to China’s.

How did this happen? In its first three decades of independence, China implemented land reforms. The rural populace could thereby rise above the acute poverty levels of the past. Then, during the late 1970s, it initiated economic reforms starting with agriculture (India did it primarily with finance). During the 1978-84 period China switched from communes to the household responsibility system in land. Agriculture grew by 7.1 per cent annually and farm incomes by 14 per cent on a yearly basis. Rural poverty halved in just six years, resulting in a huge demand for basic products—spurring manufacturing production throughout the country. Today China produces more than 600 million tonnes of foodgrains, compared to India’s 250 million tonnes (in 2014-15) from a cropped area that is less than India’s and a holding size that is almost half of India’s.

Not that one needs to mimick any other country, but what is clear is that the policies followed by successive governments have ruined agriculture in this land without giving any real boost to manufactureing/industry, thereby keeping the bulk of the country in the dark ages with oases of ‘modernity’.

For India, that is Bharat, to really develop, it must redirect the gigantic subsidies, bail-outs, tax-concessions etc. given to a handful of big business and the super-rich, and invest these vast sums in our land, water and forests (jal, jungle, zameen). And with this strong base of enhanced income generation, encourage a wide network of dispersed manufacturing to provide the basic needs of the people—thereby generating largescale employment. One does not need foreign multinational companies to produce soaps and toothpaste—where the poorest of the poor has to pay for their brand name—thousands of dispersed soap and toothpaste (and other common items) manufacturers can be set up at district level selling their produce at half the present prices.

In Wardha district some Gandhians have shown that an entire family can get all their food needs for the year from a one-acre plot (provided water is available)—utilising natural inputs with no chemical fertilisers and pesticides. The book Plenty for All has scientifically shown that the Kolhapur grape growers can get even better yields with local inputs, avoiding the huge amounts of chemicals used by grape farmers elsewhere. So, with heavy public investments all the crores of marginal and small farm households could be turned into a viable self-sustaining economy producing sufficient for their needs and maybe a little surplus as well.

Then all the middlemen, moneylenders, traders should be abolished and the government should guarantee a sales price of at least 20 to 30 per cent (if not 50 per cent, as promised by the BJP) over cost of production, as also credit on the same terms as given to the big corporates. Once agriculture begins to rebound (the GDP from agriculture has dropped from 35 per cent in 1990 to barely 13 per cent today) and rural incomes grow, there will be a huge increase in demand for manufactured items, giving a boost to industry. For all the talk of ‘Make in India’, manufacturing too has been in the doldrums since the last three decades, and has seen further decline under the BJP rule, notwithstanding its slogans.

According to an article in the EPW,24 the share of manufacturing in GDP has remained 14-16 per cent since the 1980s and in 2013 it was 15 per cent. Compare this with other countries—China was 34 per cent, Thailand 40 per cent, even Malaysia was more than India’s at 24 per cent. The sector also played a negligible role in the contribution to labour productivity. In the decade of the 2000s manufacturing contributed a mere six per cent to total labour productivity growth in India; the equivalent figures for China was 32 per cent, Malaysia 68 per cent. Value added in total manufacturing output declined from 25 per cent in the 1990s to 18 per cent in 2010-11.

This decline continues—core sector growth in March 2015 was minus 0.1 per cent, the lowest in 17 months. India Inc’s sales growth fell by four per cent in the quarter ended March 2015—one of the lowest growths since the Lehman crisis of 2008. And all figures of the IIPs (Index of Industrial Production) over the last year have been stagnant or negative. All these figures are even worse than in the earlier years. And all this in spite of the big incentives and tax concessions being doled out by the Central and State governments ‘to attract investments’.

With agriculture in decline and manu-facturing in the doldrums, there is no hope for the rural population either in agriculture or in employment. So this vast populace exists as a mass of the living dead floating around as casual labour.

Therefore, the real axis of development for our rural populace must spin on the two wheels of agriculture and indigenous manufacturing—only then will the motor of growth advance in a positive direction, with sustainability and inclusiveness.

The key for this, as mentioned earlier, is massive expenditures in the three spheres of irrigation, ecology and support for agricultural produce, coupled with the promotion of manufacturing at the district level. For this the government needs to raise resources by bringing the vast black economy (75 per cent of the GDP) into the tax net, stop the subsidies to the big corporates to the tune of Rs 5 lakh crores and stop spending thousands of crores to prop banks collapsing under the weight of bad debts owed by the corporates. If such radical steps are taken, a miracle is possible in just a few years.


1. As per Reports of the first ever Socio-Economic Caste Census (SECC-2011) released on July 6, 2015.

2. Ibid.

3. Ibid.

4. The Times of India, April 12, 2015.

5. Frontline, March 20, 2015.

6. UNICEF, The Times of India, March 29, 2015.

7. Hindustan Times, March 29, 2015.

8. Outlook, April 27, 2015.

9. FICCI Report, The Times of India, March 6, 2015.

10. The Indian Express, May 1, 2015.

11. Frontline, April 3, 2015.

12. Ibid.

13. The Asian Age, April, 22, 2015.

14. The Indian Express, May 28, 2015.

15. The Week, April 5, 2015.

16. Ibid.

17. Tehelka, May 9, 2015.

18. Vandana Shiva, The Asian Age, October 18, 2014.

19. The Times of India, March 31, 2015.

20. Outlook, May 4, 2015.

21. Hindustan Times, July 17, 2015.

22. Mid Day, June 1, 2015.

23. The Times of India, May 17, 2015.

24. EPW, October 4, 2014.

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