According to CP Chandrashekhar and Jayati Ghosh (2005): The Burden of Farmers’ Debt, Macroscan, http://www.macroscan.com/the/food/sep05/fod140905Farmers_D
• Moneylenders have emerged as the most significant source of credit for farmers, with 29 per cent accessing this source.
• The influence of moneylenders appears to be especially strong in Bihar (44 per cent) and Rajasthan (40 per cent). Traders — of both inputs and outputs — also have provided loans to 12 per cent of indebted farmers. However, institutional sources still remain significant, with more than half of farmers accessing government, co-operative societies and banks taken together
• Average amount of the outstanding loan increases with the size of the land holding, but what is more interesting is that the proportion of indebted farmers also increases with the size class.
• Even among very small and marginal farmers, the amount of outstanding loan is substantial, given the likely low incomes from such smallholdings, which suggests some sort of cumulative process leading to a debt trap for the very resource poor cultivators.
• This Report on the farmer suicides in the state of Maharashtra is being submitted as per the Judgment of the Court that made the TISS a consultant in the Public Interest Litigation Number 164 of 2004. The nature of this report is to primarily apprise the Court of the causes that led the farmers to take this extreme step, as per the findings of the research team. The Interim Report was submitted to the Court on February 16, 2005, and this Final Report is being submitted on its due date — March 16, 2005.
• The total numbers of suicides reported in Maharashtra, till December 2004, were 644, with most of the deaths occurring in the Vidharbha, Marathwada and Khandesh regions of the state. Thus, the present investigation concentrated on these regions. Out of the total 644 farmer suicides, a sample of five per cent, i.e., 36 cases were identified for the study.
• The TISS team conducted detailed case studies (life history approach) of all the families of the 36 cases; it also conducted several focus group discussions with farmers in each of the 36 villages covered.
• Repeated crop failures, inability to meet the rising cost of cultivation, and indebtedness seem to create a situation that forces farmers to commit suicide. However, not all farmers facing these conditions commit suicide — it is only those who seem to have felt that they have exhausted all avenues of securing support have taken their lives.
• It is not only the landed who have a crisis of indebtedness to deal with. There were a number of landless families who had leased land on a short-/long-term basis by securing loans. It was also noticed that many landless families managed to acquire money through migration to cities and purchased lands in the late eighties and early nineties. Many such families were caught up in cycles of debt and destitution, which ultimately led to the suicide of the head of the family. Thus, the survivors were reduced to landlessness due to debt. Among those committed included medium and large landowners who were also affected by a high level of un-payable debt.
• In the cotton belt, the crop seems to have failed more than once in the last four years. This crop failure has always not been associated with natural calamities, such as failure of rain or un-seasonal rains leading to destruction of crops. The causes are an increase in pest attacks in the last few years, especially from 1995 onwards. This meant that the farmers needed more money to pay for pesticides, though, in the end, a high level of pesticide use did not prevent crop failure.
• Longitudinal data available with government sources indicate declining productivity of land. This meant increased use of fertilisers to enhance productivity of land. The information available indicates that farmers have been spending more on fertilisers even while crop performance has been showing a declining trend. The group discussions and case studies point to the fact that the quantity of use of fertiliser per acre rose in the midnineties and has now reached a saturation point. There appears to be a decrease in the production per acre in the same area.
• The farmers are dependent on agents of fertiliser and pesticide companies for advice on seeds and crop care. The information base of the farmers is, thus, limited to the data provided by the agents and their products. A false perception of prosperity is being created in the minds of the cultivators that prompts them to take serious risks in terms of fertiliser-based cropping pattern.
• Input costs have also exhibited a sharp rise. Agriculture has become more expensive post-1995. This rise in the input cost is reflected in the electricity bills, rising costs of high yielding variety (HYV) seeds, fertilisers, energy (diesel), transportation, etc. The rising input cost is not matched by the crop yield and price obtained. The minimum support price has not been available to all farmers, particularly the small and marginal farmers. Large landowners have been able to benefit from support price, when the government has occasionally provided such support. The absence of support price has had serious implications to the farmers.
• Declining opportunities in non-farm employment has further aggravated the crisis. It seems that in areas where suicides have occurred, non-farm options are getting limited.
• Those farmers who faced repeated crop failures accumulated loans beyond their capacity to repay. Thus, most of victims had turned defaulters over the last four years. This points to a serious crisis as reflected in the absence of the support system to bail the farmers out, in the form of relatives, neighbours, banks and even the moneylenders who had stopped giving the loans to them lately.
• The investment (at 1980–81 prices) stood at Rs. 1,266 crores in 1950–51 and rose to Rs. 5,246 crores by 1978-79. However, it has declined since 1978–79 and was only Rs. 4,692 crores in 1990–91. The share of agricultural investment came down from 22% in 1950–51 to 19% in 1980–81 and even further to about 10% in 1990–91. This has adversely affected the public sector investment in irrigation as more than 90% of the total public investment in agriculture goes for irrigation. The share of the irrigation sector (in states only) in the total public investment came down from 14.7% in 1980–81 to only 5.6% in 1990–91 (at 1980–81 prices) of the public sector investment, whereas the total increase in investment was at the rate of 6.3% per annum.
• In 1989–90, the total subsidies to agriculture amounted to Rs. 1,3500 crores — these were mainly given on fertilisers, irrigation and electricity. These subsidies have gone towards the development of the wealthier farmers in regions where investments have already poured in.
• The opening up of Indian agriculture to multinational corporations and the withdrawal of the GoI from this system of production has occurred simultaneously. Moreover, the internal markets have become unstable due to the lowering of tariff barriers. Unfair terms of trade towards agriculture of developing countries have made matters worse for those who are engaged in and/or are dependent on this system of agriculture.
• Bio-diversity is under threat due to TRIPS and the WTO. Environmental degradation resulting in deforestation and depletion of water availability (drinking and agriculture), both in quantity and quality, has made the situation more serious. Untenable cost of production in modern agriculture techniques, institutional and low interest credit and the absence of a credible security net (i.e., crop insurance) are not making things easy for the cultivators in the country.
• Favourable / Unfavourable agro climatic situation among the State leading to variation in per hectare yield: The agro climatic situation varies from State to State. This leads to variation in per hectare yield. The per hectare yield in Maharashtra State is less in comparison with the yield of other States due to inadequate irrigation facilities and unfavourable agro climatic situations. This leads to more cost of production. However, due to favourable agro climatic situation and sufficient irrigation facilities, the per hectare yield in Haryana and Punjab is more. Therefore, the cost of production of these States is conducive for the States where a particular crop is grown on a large scale. This adversely affects States like Maharashtra who have unfavourable agro climatic situation and higher cost of production. The Minimum Support Prices declared by Government of India does not cover the cost of production of the agriculture producer to the full extent. Therefore, the Minimum Support Prices do not give full justice to the farmers of the State having high cost of production. Therefore, instead of declaring one Minimum Support Price at the National Level, separate support prices may be declared for groups of States according to the cost of cultivation.
• In connection with the price environment for the farmers, it needs to be pointed out that there has been considerable increase in the price of important farm inputs during the last five years. Between 1990–91and 95–96 while the prices of wheat as measured by the average of wholesale price indices increased by 58%, that of fertilizer increased by 113%, that of irrigation by 62% and insecticides by 90 percent. While the recent revision in the administered prices of petroleum products, the price of diesel would be higher by 75% than their level during 1990-91. The report further points out that the small and marginal farmers do not get ever get the administered price declared by the state