Daily Current Affairs – 28th January, 2017

Daily Current Affairs – 28th January, 2017

Farmers’ deaths: Why and What next?

  • Tamil Nadu has been troubled by a severely deficit monsoon which triggered the worst drought in 140 years and the farmer suicides news are now resurfacing in farming heartlands of the state.
  • Over 100 farmers, mostly in Cauvery delta have reportedly committed suicide during a period of one month and the numbers are rising.
  • Various farmers’ associations have expressed their concerns before the State government and have demanded immediate relief measures to put a break on farmer suicides.
  • The CM of Tamil Nadu declared entire state drought-hit after an official report was submitted which mentioned extent of drought and farm deaths. Measures worth Rs. 160 crore and Rs. 350 crores to alleviate the water crisis in urban and rural local bodies respectively were also announced.
  • Fund allocation to meet the fodder needs of cattle, rescheduling of farm loans, cancellation of land tax and compensation for lost crop to drought-affected farmers has also been initiated.
  • Promises have also been made to provide employment to the rural population at an outlay of Rs. 3,400 crore by engaging them in desilting of canals and tanks and extending employment under the MGNREGS by 50 days.
  • These measures look promising and beneficial to distressed farmers but the underlying rootcause of the farm suicides needs to be addressed. Makeshift solutions are not the panacea to prevent farm suicides in future.

Who is the killer?

Farmer suicides is not a new phenomenon. The National Crime Records Bureau (NCRB) report of 2015 shows that the number of farmers committing suicide rose more than 41% in 2015 over 2014.

Such a statistic is puzzling and shocking despite innumerable State and Central interventions.

Drought?

  • It has been constantly debated if drought is the only factor driving farmers to commit suicide?
  • If that had been the case, 1972, 1982 and 1987 were worst drought years, yet no suicides were reported.
  • Droughts lead to crop losses which are generally compensated by the government in the concerned year. Hence, drought doesn’t literally propel farm suicides.

Debt?

  • The NCRB report underlines that indebtedness is the single largest underlying cause behind farmers’ suicide.
  • Even in 2007, the Radhakrishna Committee on Agricultural Indebtedness appointed by the ministry of finance had underlined that farm indebtedness is the main cause for such an extreme form of distress.
  • Hence, it is a matter of concern that policy makers have not taken this area of concern on a serious note even after 10 years since the committee submitted its recommendations
  • The belief in policy circles that a loan waiver can solve farm suicides is largely misinformed and misses a concrete base.
  • It is because that had one-time relief package been a bailout for debt-ridden farmers, then the massive RS. 71,680 crore Agriculture Debt Waiver and Debt Relief Scheme announced in May 2008 should have produced the desired results by now.
  • However, government data ironically indicates increase in farm suicides after loan waiver!

Non availability of credit?

  • It has been reported that non-availability of credit has been causing distress among farmers. For this, a doubling of the agriculture credit scheme was introduced during 2004-05 to increase the flow of credit to farmers.
  • However, the Rangarajan Committee on Financial Inclusion (2008) noted that about 66% of marginal farmers still resorted to informal sources of credit.
  • Even the report of Task Force on Credit-Related Issues of Farmers (2009) categorically stated that the dominance of moneylenders has continued even after the introduction of doubling of farm credit policy.

These findings suggest that there is something beyond droughts, debt and credit non-availability which is causing farm suicides.

The real culprit

  • The rapid pace of increase in cost of cultivation of various crops has been a major problem for farmers in the last two decades.
  • The Commission for Agriculture Costs and Prices (CACP) data on cost of cultivation of different crops shows that most of the foodgrain and non-foodgrain crops in the major growing regions of the country have incurred losses from early 1990s onwards.
  • The reason is that crop losses that prevailed during the pre-nineties gathered momentum during the post-nineties.
  • CACP tells that in nineties, the gross cost required for crops cultivation was almost similar to value of output (VOP) in almost all the major foodgrain and non-foodgrain crops across major growing states.
  • This resulted in dwindling of profit margins during the period with no or very little profit for the cultivators. The farmers suicides came to fore only in the late 1990s with the effect of cost escalation showing its fangs.
  • Maharashtra has reported maximum number of suicides which is evident from the following
    • Gross cost at current prices escalated massively from Rs. 3,267/ha in 1989-90 to Rs. 61,907/ha in 2011-12.
    • The Profits fluctuated sharply from Rs. 5,585/ha in 1994-95 to (-)Rs. 654/ha in 2011-12.
    • The sugarcane prices have been rising at an alarming rate and ironically, the sugarcane farmers of Maharashtra have not reaped any appreciable profits in relation to its gross cost.
  • Though there has been increase in all major input costs, there has been abnormal increase in wage cost in recent years. The reason lies with implementation of MGNREGS which escalated overall cost of cultivation of the crop.
  • Andhra Pradesh’s paddy crop has not proved to be beneficial to its farmers
    • The profits varied only between Rs. 273/ha to Rs. 170/ha during 1970-71 and 2011-12.
    • Paddy cultivation suffered losses in 19 out of 36 years, compelling AP to declare a ‘crop holiday’ during kharif 2011.

IASbaba’s views- Targeting the cause

It has been understood that income from crop cultivation is neither adequate nor consistent. Hence it is futile to announce one-time relief measures to heal the wound of farmers and also inflict fiscal burden on government.

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