Farmers in distress

Develop rural non-farm sector by Ranjit Singh Ghuman Though the phenomenon of suicides by farmers in India has been aptly highlighted by the National Farmers' Commission (NFC) and the media, there are few studies pertaining to the socio-economic analysis of the victims and their households. According to the NFC, about 1.5 lakh farmers committed suicides in India up to 2006 in various states of India. The states with success stories of the green revolution have a high incidence of farmers' suicides. Some studies conclude that the highly capital intensive technique and over-mechanisation of farming operations have resulted in enormous increase in cost of cultivation. In fact, the entire farming operation is subject to serious diminishing returns. This means that the additional increments in the agricultural produce are coming up at a very high additional cost. As a consequence, the net return of the farmer is continuously declining and the debt burden is rising. It has been computed from the cost of cultivation data that the trend growth rate of per hectare net return, over variable costs in Punjab, from both wheat and paddy, was -2.18 per cent per annum during the decade of 1990s. It was -15.46 per cent per annum in cotton during the same period. Alongwith the declining net return, the employment opportunities in agriculture are also shrinking. According to certain estimates (Sucha Singh Gill, 2002), employment in principal crops in Punjab declined from 48 crore man days in 1983-84 to 43 crore man days in 1996-97. Given the state of technology, cropping pattern and shrinkage of land under agriculture, the availability of employment in agriculture must have declined further. In fact, per hectare employment of labour in major crops in Punjab declined by 20.31 per cent in 1996-97 compared to 1983-84. Alongwith this, the net sown area decreased from 4250 thousand hectares in 2000-01 to 4170 thousand hectares in 2005-06, in Punjab. Pressure of workforce on agriculture in India has not declined much over the period of time. At the same time, the number of marginal and small operational holdings in India have increased. A little more than 80 per cent of operational holdings in India are less than five acres. It is amply clear from the foregoing discussion that the economic distress of farmers at the lower rung is not simply because of crop failures or other such reasons, as is being projected by many economists and policy planners. The fundamental reason of their economic distress is rather their limited earnings from their very very small sized operational holdings. What can an acre of land can fetch to a farmer household in a year? The net earnings are between Rs. 15,000 to Rs. 20,000 at the maximum. About 62 per cent of the farmer-households in India fall in this category. If the average family size of such farmers is five persons, then their per day per capita income comes out to be between Rs. 8 to 11. According to a recent report on the status of workers in the unorganized sector (Govt. of India 2007), 77 per cent of the Indian population is having a per capita income of up to Rs. 12 a day. It, thus, includes the above 62 per cent of the farmer households. A recent study (2007) commissioned by the Punjab Farmers commission, on the Agricultural Labour in Punjab, also highlights that per capita daily income of 68 per cent labour households is only up to Rs. 10. This study also highlights that in 69 per cent of the total rural households and 90 per cent of the rural labour households in Punjab there is not even a single matriculation person. The meager level of earnings, non-availability of alternative employment opportunities, shrinking employment opportunities in agriculture, pressing social commitments, non-availability of adequate institutional loan, etc., are responsible for mounting debt burden on the farmers and labourers. According to a recent NSS survey (2005), 48.6 per cent farmer households are under an average debt of Rs. 12585. As regards farmers' suicides in Punjab, there are various estimates. Bharti Kisan Union (Ekta-Ugrahan) has already enlisted 3126 suicides by farmers and agricultural labourers from 376 villages located in 10 districts of Punjab. Interestingly this data pertains to only 3 per cent of the total villages in Punjab. This necessitates a detailed census of suicides in the state. A recent study of 2008 (Gurpreet Singh, Punjabi University) highlights that out of 200 sampled suicide victims 33 were agricultural labourers. This means agricultural labourers are equally under economic distress. The study highlights that about 81 per cent farmer suicide victims own less than 5 acres of land and the remaining 19 per cent were in the range of 5 to 10 acres. The average amount of debt on the farmer victims' households was Rs. 2.7 lakh and that and the labour households was Rs. 57121. It is often said that unproductive use of loan, drug addition and shirking from work are the basic reasons behind farmers' suicides in Punjab. Various studies, however, highlight that economic distress is the root-cause behind the suicide by farmers and labourers. As regards work-shirking, not even single farmers upto 5 acres employ any attached labourer. Only 35 per cent of such farmers occasionally employ casual labour. Clearly, the solution to the problem lies in the correct diagnosis of the illness. The illness lies in the small-size of holdings and unbearable burden of workforce on agriculture. The solution would, thus be, the systematic withdrawal of work force from the agricultural sector. And that would be possible only by the development of the rural non-farm sector. This transition is inevitable. Planned and systematic efforts would, however, make it less painful. The writer is professor of economics at Punjabi University, Patiala