Maharashtra state : Case study Suicides among farmers
from Srijit Mishra Report Submitted to the Government of Maharashtra
(Indira Gandhi Institute of Development Research, Mumbai,26 January 2006)
The small and marginal farmers also bear the brunt of unavailability of water and its associated yield uncertainty. Linking of the national market with international markets has also increased the price uncertainty. a bad monsoon leading to crop failure or a glut in the market can put him into a quagmire of indebtedness and crashing of dreams. The farmer cannot get his daughter/sister married, he cannot send his children to college for higher education or he cannot meet health expenses for the family members to mention a few of his responsibilities. This brings about a feeling of dejection and failure among some farmers who in their moments of despair think that life is not worth living any more and they end up committing suicide.
In particular, we ask the following questions. What is the nature of the current agrarian crisis? Is it largely related with failed cultivation? Is it also associated with rural credit scenario? Is there a withdrawal of state support from the rural agrarian scenario? Is there a geographical concentration of suicides? Is it of seasonal nature? Is it high among certain social group (age, caste, education and land size owned) that is aggressive in its pursuit of attaining economic well being? Is indebtedness an important risk factor? What are the other socio-economic risk factors?
Maharashtra state, the results are somewhat similar – linear trend growth rate for production of Cereals is negative. The increase in area under Sugarcane in the despite the fact that yield of Sugarcane is lower
than the state’s average.
In 2004-05, despite delay in rain, there has been record production of Cotton. It is estimated at 232 lakh bales for India, an increase of about 70 lakh bales from the previous year. The situation is also good in Maharashtra where it is estimated to be more than 52 lakh bales from 31 lakh bales in the previous year. This increase in production of Cotton has been worldwide leading to a fall in prices of Cotton. considering the insecticide usage in Jowar, Tur and Soyabean as proxies for its usage in Cereals, Pulses and Oilseeds one can calculate that from across five crop groups, Cotton accounts for more than 89 per cent of the total expenses for insecticides. The farmer receives the MSP if the produce is of fair average quality and if it is sold in authorised centres. In practice, farmers sell the produce in the open market where the prevailing price is lower than the MSP. Office bearers involved in grading and weighing took to rentseeking activities. The farmers paid commission to middlemen at the procurement centres.There emerged a class of traders in the guise of farmers. The farmer sold his produce to a trader-farmer at a lower price. The payment to farmers was delayed and staggered. In 2004-5, there was an increase in cotton production all over the world and open market prices fell much below the MSP. Price paid per quintal (average fair quality of long staple) was about Rs.2500, but payment was not immediate. Many farmers sold their produce in the open market at Rs.1900 or even lower. A perusal of the all India situation suggests that gross fixed capital formation in agriculture as a proportion of gross domestic product (GDP) declined from 3.1 per cent in the early eighties (1980-5, which also coincides with the sixth plan) to 1.6 per cent in recent times (1997-2002, which also coincides with the ninth plan). During the same period, gross fixed capital formation in agriculture as a proportion of total gross fixed capital formation declined from 13.1 per cent to 7.4 per cent.. Information on farmers’ indebtedness across states from the National Sample Survey Organisation (59th round) survey of January-December 2003, the results of which were released in May 2005. It shows that more than half of the rural households in Maharashtra are farmers and more than half of the farmer households are indebted. In Maharashtra, compared to the all India average, the proportion of farmers is less but that of indebted farmers is more. Within Maharashtra as well as in the all India scenario, a relatively greater proportion of the other backward caste and the other caste farmer households seem to have loans. Nearly three-fifths of the farmer households in Maharashtra depend on cultivation as their source of income and this proportion is slightly more among the indebted farmers. There are about three features separating out Maharashta from the all India average and the three states of Andhra Pradesh, Kerala and Punjab.
International and Domestic Policies Impact on Cotton Prices in India Excess international supply at a lower price is also because of direct and indirect subsides leading to dumping by the United States of America (USA). During the period 1998 to 2003 Cotton export prices from USA were lower than their cost of production by more than 50 per cent on average and had reached a maximum of 65 per cent in 2002 (Murphy, Lilliston and Lake, 2005). As against this, domestic policies in India have led to removal
of quantitative restrictions and subsequently reduction of import tariff from 35 per cent in 2001-2 to 5 per cent in 2002-3. All these exposed the domestic prices of Cotton to the volatility of international prices. This has been adversely affecting the Cotton farmer. Similarly, excessive Cotton exports leading to an increase in yarn prices can adversely affect the handloom and power loom weavers. Thus, variable import and export tariffs
that guard movements in domestic prices against volatility in international prices could be of help to both producers and consumers
.
Almost all the farmers have some outstanding loans taken either from formal or informal sources.Current operational loans are likely to be from moneylenders. There are a number of them operating from district headquarters, taluka headquarters and smaller ones operating at the 24 Suicide of Farmers in Maharashtra
village level. The village moneylender in turn could have taken loans from larger moneylenders or input dealers operating at the taluka/district level. The ones operating at the village level are either economically or politically or socially dominant. Informal loan transactions could be in dedhi. The debtor has to return the loan around harvest (within four to six months) and pay Rs.150 for loan of Rs.100. Similarly, there is sawai (payment of Rs.125 for loan of Rs.100).
Another popular form of loans for agricultural and social purposes is at an interest rate of Rs.10/Rs.5 per month. In this case the interest is calculated after the principal is returned. For a loan that is repaid in 4-6 months, Rs.10 interest is similar to dedhi whereas Rs.5 interest is similar to sawai. The difference crops in if for some unforeseen reasons like crop failure the loan is not repaid. Non-payment virtually leads to rewriting of a fresh loan with some additional credit being given during the start of the next agricultural season. The
cumulative interest paid will be lower under dedhi/sawai than under an interest rate of Rs.10/Rs.5 per month.
The rewriting of old loans as fresh loans makes the debtor feel that the old loan is written off and he is being given a new loan. During this rewriting of loan the debtor is also given some additional credit. Thus, the debtor is made to understand that on the loan he is taking he pays an interest of dedhi, sawai, or Rs.10/Rs.5 per month. As against this, loans from formal sector cumulate over time and the absolute difference between amount taken and amount repaid can become higher than dedhi/sawai. For instance, at 14 per cent compound
interest per annum, non-payment of loan for a little more than 3 years (say, 38 months) will be higher than dedhi and non-payment for 2 years will be higher than sawai.
A conventional form of giving loan is through mortgaging of land. Creditors now consider it risky because fatality like suicides can lead to cancellation of such contracts. They have come up with a new design. They insist on sale of land with a verbal (not legal) promise that it will be sold back to the debtor after the loan is repaid. If required, legal registration expenses on both counts are borne by the debtor.
The difficulty in selling their produce at the Government procurement centres. the presence of middlemen
who take 1.5-3.0 per cent as commission. indicated the delayed payments for produce sold at Government procurement centers. also feel that the price they receive for their produce is inappropriate.
many people have migrated out in search of jobs.These included people those who have land and also those who are landless. Some of the migrants and their family members said that work is not available near the villages, and hence, they had to go to far off places.
India agriculture is monsoon dependent.
Suicide in Maharashtra
suicides in Maharashtra suggests that for males 31 per cent is due to family problems, 8 per cent is due to insanity, 24 per cent is due to other illness, 11per cent is due to economic reasons, 1 per cent is due to love affairs, 2 per cent is due to female victimization and the remaining 23 per cent is due to other reasons. For females, 41 per cent is due to family problems, 8 per cent is due to insanity, 20 per cent is due to other illness, 3 per cent is due to economic reasons, 2 per cent is due to love affairs, 12 per cent is due to female victimization and the remaining 12 per cent is due to other reasons. For male suicide deaths: 34 per cent were by consuming insecticides, 8 per cent were by consuming other poison, 10 per cent were by drowning, 7
per cent were by self-immolation and the remaining 8 per cent were by other methods. For female suicide deaths, 30 per cent were by consuming insecticides, 8 per cent were by consuming other poison, 18 per cent were by hanging, 15 per cent were by drowning, 26 per cent were by self-immolation and the remaining 3 per cent were by other methods. This shows that across gender there are some differences.
The total number of farmer suicides increased from 1083 in 1995 to 4147 in 2004. The increase was largely because of 288 per cent increase in male farmer suicides from 978 to 3799. During this period, male farmer suicides as a proportion of total male suicides in Maharashtra increased from 14 per cent to 38 per cent. SMR for male farmers more than trebled from 17 in 1995 to 53 in 2004, but for females the trend fluctuated to reach a peak of 12 in 2001 but thereafter it has been declining. Age-adjusted SMR for males increased from 17 in 1995 to about 21 in 2001 and has remained at that level for the remaining three years whereas age-adjusted SMR for females reached a peak of 14 in 1998, but thereafter it has been declining.
higher suicides among SCs and STs and lower among ‘other’ castes. For all castes, the ratio of sample to population proportion indicates relatively higher suicides among marginal size-class and small size-class of farmers and lower suicides among ‘other’ size-class of farmers. In 79 per cent of the cases, suicide was committed by consuming insecticide/pesticide. It is said that Cotton cultivation in about 8 million hectares occupies 5 per cent of total arable land in India, but uses 54 per cent of pesticides. a hospital that can treat emergencies like poisoning is on an average more than 20 kilometres away This means that the time taken to reach a treatment centre in these hilly regions can easily be more than an hour. This delay can prove fatal.
Suicidal factors. fall in economic position (74 per cent). Taking loans can be associated with indebtedness. Loans per se will not lead to a fall in economic position, but if it reaches a stage that will lead to sale of assets then it can be associated with a fall in economic position. Similarly, a fall in economic position can also lead greater reliance on credit, increasing the debt burden.
Most of the households are nuclear, but the proportion of joint families is slightly higher in the non-suicide control group. Despite a slightly higher proportion of nuclear families, it is intriguing that the average family size, after including the deceased individual, is higher among suicide case households. This is largely due to a relatively greater size in average number of females. The average number of members in occupation is higher among the suicide households, but this being the situation when the survey was conducted it could indicate coping strategy after the death of the main breadwinner.
Suicide Cases Eligible for Receiving Compensation.
all farmers who committed suicides are not investigated for compensation. In 2004, police records indicated that there were 4147 suicides of those whose profession is self-employed in agriculture.
The surviving members of a deceased
individual’s family are considered for receiving compensation of Rs.1 lakh if the following
three conditions are satisfied:
• The deceased was a farmer and its proof lies in ownership of land,
• The deceased was indebted when the incident took place
• Indebtedness was the cause of suicide
On land ownership, there are
differences in de facto and de jure ownership of land. Land is not in the deceased individual’s name; it is in his/her father or spouse’s name. Two individuals from the same family have separated and cultivate independently, but legally the lands are still under a single ownership. The legal landowner may not be residing in the village and might have rented the land out to tenants for cultivation. On indebtedness, one observed that almost all those interviewed had some or the other loans. It is easy to investigate and verify institutional loans, but not so when the amount is from informal sources like a moneylender or a trader-cum-moneylender. More so, after the demise of the debtor when the interest rates and collection practices by the creditor are likely to come under scrutiny. There can be practical difficulties in identifying cause based on circumstantial evidence because the deceased is no longer among us. Given this limitation, any investigation that forms the basis
for compensation will have to sort out two possible errors. First, it should not exclude genuine cases from being given compensation. Second, it should not include those that do not deserve to receive compensation. Any compensation criteria or investigation should keep in mind that both errors should be minimised, but exclusion error should be considered as more serious.
From the suicide cases under analysis, basic particulars of the deceased indicate that 91per cent were males, 71 per cent were below 50 years of age, 80 per cent were currently married, 39 per cent completed their matriculation or higher education, 58 per cent had more than 10 years of experience in farming, and in 79 per cent of the cases the method of committing suicide was by consumption of insecticide/pesticide.The interrelated and co-existing socio-economic stressors identified in order of frequency are indebtedness (87 per cent), deterioration of economic status (74 per cent), conflict with other members in the family (55 per cent), crop failure (41 per cent), decline in social position (36 per cent), burden of daughter’s/sister’s marriage (34 per cent), suicide in a nearby village (32 per cent), addictions (28 per cent), change in behaviour (26 per cent), dispute with neighbours/others (23 per cent), health problem (21 per cent), a recent death in the family (10 per cent), history of suicide in family (6 per cent), other family members being ill (3 per cent). Comparing suicide case and non-suicide control households, one observes that the former have slightly higher proportion of nucleus families, have a higher average family size (particularly, greater number of females), ownership of assets and access to basic amenities is lower, and more importantly the average amount of loan is much higher and the average value of produce is lower.
In Maharashtra, gross value addition is relatively higher for Fruits & Vegetables and Sugarcane. Traditionally, Cotton has been the cash crop for farmers in most of the suicidal case. Over the years, profitability from Cotton has declined. Some of the reasons are: high subsidies by the USA leading to price distortions, low import tariffs in India, and failure of the MCPS in Maharashtra. Withdrawal of the state is evident from declining public investment in agriculture, poor government agricultural extension service, diminishing role of formal institutions in rural financial market among others. The farmer now depends on the input dealer for advice leading to supplier-induced demand and on informal sources of credit with greater interest burden.
Suggestions:
o Credit market needs immediate attention. Reduce interest rates charged to the farmer
o Flow of Credit to Agriculture and Related Activities from the Banking System.
o There should be strict supervision by formal institutions to prevent diversion of loans given for this purpose.
o Enabling the formation of an information bureau will help formal institutions to judge credit worthiness of an
individual. When moneylenders operate in a village, they take the help of a prominent person of the village to gather information on credit worthiness of an individual and at times also use their influence to recover loans. In return, they pay him a commission.
o The farmer’s problem is rooted in his exposure to risk – yield as well as price shocks. Insurance schemes may be devised to mitigate these. Crop insurance will be linked with yield risk. Income insurance will address the poor returns, particularly for marginal and small farmers and also tenants. The poor returns could be because of poor prices, low yields or high transaction costs arising out of low quantity of produce.
o A risk mitigation fund can be generated to finance the three different insurance schemes – crop, credit and income – or any other appropriate risk mitigation scheme. This fund will have contribution from the Government and can also be drawn from the Rural Infrastructure Development Fund (RIDF).
o Where agriculture is largely rainfall dependent, strategies to increase irrigation potential (particularly, through watershed development), should be devised so as to provide scope to increase value addition.
o The important cash crops of this region are Cotton and Soyabean. To reduce the vulnerability, the farmer should have more options and be able to go beyond these crops. Policies that can make diversification of cropping pattern feasible should be put into place. Inter cropping, fitting two crops, crop rotation and horticulture should be encouraged. Better water and land management will also help in attaining this objective.
Inputs in the form of seeds, pesticides and fertilisers sold to farmers could be of spurious quality. There is no regulatory mechanism. We came across situations where farmers were advised by traders to go in for a third sowing – a case of supplier-induced-demand. The private traders should be regulated.
o It will be beneficial on two counts - to reduce costs associated with pesticides and fertilizers and reduce the availability of pesticides for committing suicide. We have also observed its successful practice in two cases during our survey. Replication of such experiments should be encouraged. For instance, shifting from inorganic to organic farming will give low returns in the initial two to three years. This acts as a deterrent for marginal and small farmers. Compensating them during initial years would help.
o The farmer is exposed to price fluctuations, increase the import tariff.
o Good marketing network can reduce transaction costs. It will also provide non-farm employment opportunities with agricultural linkages.
o A large proportion of rural population being dependent on agriculture (cultivators and agricultural labourers) indicates that there are not many avenues of diversifying sources of income. Agro-based industries and other non-farm opportunities should be increased.
o Encourage bio-pesticides and phase out chemical pesticides within a time frame. Some of the above-mentioned practices have helped reduce organophosphorous poisoning deaths in Sri Lanka.
o One of the reasons for indebtedness is expenses associated with marriages in the family. A related risk factor observed is the difficulty in conducting daughter’s/sister’s marriage when faced with an economic crisis like crop loss. Initiate involvement of civil society to discuss and bring about changes in the society by curtailing huge expenses on marriages and other social functions.
o Healthcare needs and higher educational requirements also lead to credit requirement and indebtedness. Poor infrastructure also adds to transaction costs in terms of storage and marketing. Poor transportation can also lead to delay in seeking 78 Suicide of Farmers in Maharashtra healthcare during times of emergency.
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