- Category: Economics
- Published on Thursday, 19 July 2012 02:42
- Written by Ramanpreet
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Evidence show that growth in agriculture reduces more poverty than growth in other economic sectors (Ravallion and Datt, 1996). Therefore it is understood that rapid growth in agriculture and allied activities is a major policy concern for development of this region.
Indian agriculture is considered to be one of the largest private sector enterprises in the country where more than 110 million farmers live. It engages two-third of total workforce, contributes to 26 per cent of the GDP and nearly one-sixth of the total export earnings. India inherited a stagnant agriculture at the time of independence growing at an annual rate of growth of 0.3 per cent in the first half of the last century1. It is believed that through agriculture there are many families which are fulfilling their family needs. Agriculture is conventionally looked at in a narrow technical way, but needs to be seen in a larger context where not only production but producers are equally important. Today both are in crisis in Indian agriculture-the agricultural and the agrarian2.
Formal Credit Assistance
It is believed that the reinforcement of agricultural credit in India began with the establishment of RBI in 19353. It has been argued by Reddy (2001) that it is perhaps the first central bank in the world to have taken interest in the matters related to agriculture and agricultural credit, and it continues to do so.
A review of performance of agricultural credit in India reveals that though the overall flow of institutional credit has increased over the years, there are several gaps in the system like inadequate provision of credit to small and marginal farmers, paucity of medium and long-term lending and limited deposit mobilization and heavy dependence on borrowed funds by major agricultural credit purveyors.
With the changing requirement in the agriculture sector , agriculture credit policies have been reviewed from time to time in India and it is reflected in share of agricultural credit in priority sector lending .18 per cent of net bank credit has been stipulated for the sector. The Approach Paper to the Eleventh Five Year Plan had set a target of 4 per cent for the agriculture sector within the overall GDP growth target of 9 per cent. The mid-term review of the Eleventh Plan shows a severe decline in the growth in agricultural sector in the year 2009, the worst in 37 years4. However the overall achievement can be understood this year.
Indian Agriculture in Pre-Independence Period
In the sixteenth- seventeenth century or the time before that, only traditional forms of agriculture were prevailing in India. To be more specific, it was sustainable agriculture5. The agriculture was backward and lacked scientific approach. It was becoming an important factor that these conditions should be improved. The government thus set up the Royal Commission on Agriculture in 1926. Based on their findings the Imperial Council of Agricultural Research (ICAR) was formed and during the period agricultural flourished. But, during the period from World War II to Independence agricultural suffered setbacks. The famine of 1943 resulted in the death of millions6. To add into it, the partition of the country resulted in a disproportionate reduction in growth-stimulating assets, particularly irrigation (17.6 percent as compared to undivided India 32 percent).7 Then, in the period of British colonization, there were few extensive changes being observed. A large portion of land came into the capture of landowners8.
Indian Agriculture in Post-Independence Period
India got its independence at the time when the country was experiencing its worst phase in agriculture. A major famine at Bengal had occurred. The situation of India was worsening as many of the poor farmers were turning into landless labourers while on the other side it was very important for the country to improve methods and techniques of production so as to cope up with modernization and to become industrialized.
After the India got independent, the government of India took an initiative to concentrate food supply to the ever growing population. Indian agriculture achieved an annual growth rate of 2.7 percent in the post independence era. There were also adoption of the newly developed High Yielding Varieties (HYVs) of wheat and rice in the ‘Green Revolution’ of the 1960’s. Though the yields increased substantially but at the same time it was realized that there were many negative sides as well. It was later found that many of the small famers weren’t able to meet the burden of the expensive market seeds and other inputs. On the other hand, many found themselves to be caught in a credit trap and thousands of farmers did commit suicide in the last couple of decades across the country9.
During the decade of 1980's the growth in food grain production was most impressive at about 3.7 per cent compared to population growth of 2.2 per cent. Unfortunately, it slowed down in nineties to 1.8 per cent, lower than the population growth of 2 per cent10. Not only this, further it was observed that in the longer run environmental consequences such as soil degradation, ground water depletion and weed and pest resistance raised their heads. According to the Survey of Indian Agriculture 200411, response to fertilizers has gone down drastically from 50.25kg grains per kg nutrients (1969-70) to 11.55kg in 2004(almost 5 times reduced).
The Green Revolution
The era of Green Revolution came into existence in 1960’s. It was popularized by William Gadd, the administrator of the USAID to describe the dramatic increase in productivity and production in major cereals, triggered through high yielding varieties (HYV)12. Though the green revolution came into existence with high aims, the dream could not sustain for a longer period13. The primary aim of the revolution was to increase the economic welfare and yields in addition to addressing food sufficiency problem. To achieve the same, use of synthetic fertilizers, sturdy hybrid strains, pesticides and many other steps were taken. The results came as a magic to the farmers especially in the starting few years.
High yields of variety were obtained in the early stages of green revolution. Abundant harvests were obtained to which bumper yield of grains was produced. The farmers became so happy thus adapting the new scenario rapidly. On the other hand, the government of agriculture and agriculture scientists started working wholeheartedly for the green revolution.
But just like any other dream, the success story of green revolution also lasted for about 20 years or so and came to an end. And the end was not just an end but a starting stage of surplus problems14. The decline came in the fertility of the soil even after using the intensive chemicals. Another way of improving the fertility was through living organisms like earthworms was also tried but even they got rid off in the process of improving the fertility of the soil.
Status of Farmers: Farmers Suicide in India
One of the major issue related to farmer’s history in India stands to be the suicidal cases which took place. Since 1995, there are approximately 2.5 lakh farmers who committed suicide. Not only this, it may be that the number of actual suicides may be even more than this whose number couldn’t have recognized in the statistics. Busy with crafting a palatable picture of “shining” India, the mainstream media has neglected its duty to report on the lives and livelihoods of the largest group of working people in India: farmers15. There was not much role taken neither by the state government nor the central government.
Though almost all parts of India were found to have suicidal cases, but, broadly it can be said that few of the sates were majorly affected. Almost two-third of all farm suicides have occurred in five States: Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and Chhattisgarh. Maharashtra posts a dismal picture with over 50,000 farmers killing themselves in the country's richest State in that period16. Because of all such situations, it is considered as the worst state having so many deaths in a decade now.
To justify it further, it can be further explained with the help of the following figure. The Figure shows the number of suicides in India in the period 1995-2010. The diagram shows the all India data, top 4 states data and the top 8 states data17. The analysis that could be made out of it was that there was overall an increase in suicides between 1995-2010.
Figure: 1.1 Farmer Suicides in India, 1995-2010 (All India, Top 4 States and 8 States)
Source: The Sanhati Collective,January 15,2012
Probable Reasons for Committing Suicide
Though there could be many reasons of famers forced themselves to commit suicide, some few probable reasons18 are as follows:-
Financial Stress- There always remains a financial stress related to the “Financial Crisis” over the farmers. The uncertainty which lies due to floods and droughts add to the economic problems.
Uncertain Disasters- There are many losses which occurs because to protect them from Crisis is not under farmers control, such as any loss from crop getting disease, weather change, change in the government policies, etc.
Sense of loss- When there is repeated sense of hopelessness, arising loss of crops, loss of land, have to face loss of income, loss of community, there exists loss of family farm, it eventually gives a loss of a way of life i.e., losing out everything.
Untreated Mental Illness- Many times, farmers remain inaccessible to the medical facilities due to staying in the rural areas.
Geographical remoteness- There may be factors like geographical remoteness.
Depression- Depressing orders which may arise from exposure to agricultural chemicals/pesticides may increase the risk for mood disorders and ultimately suicide.
Minimal Financial Support becomes one of the Important Concern
One of the major causes of concern was the financial support which was not equitably generated for the farmers. But at the same time the cost of input, the prices of pesticides/insecticides were increasing. In order to compete and to obtain better results, farmers were being forced to use the high cost seeds. There was almost negligible support from the government for marginal and small farmers.As most of the farmers were generally illiterate or less educated therefore they were unable to qualify the strict and lengthy procedures of banking institutions and are left with no other option but to return to the moneylenders, borrowing loans from them at a higher rate of interest. The number of farmers committing suicide was staggering. More than 1 lakh farmers have taken their lives since 1997.Out of these almost 87percent of the farmers who had killed themselves were financially indebted. On average, there has been one farmer’s suicide every 32 minutes since 200219.
It is observed that the persistence of distress in Indian agriculture is perhaps because of two intertwined dimensions- the agricultural and the agrarian. There was an agricultural development crisis out of the poor designing of progammes and inadequate allocation of resources on one hand. While the agrarian crisis which threatens the mass of small marginal farmers and agricultural labourers. The outcome of the former part was that it adversely affected the agriculture productivity and production. The irony is that the hands which produce food do not get adequate amount to consume. There is no doubt that to revive farming and to sustain proper farming, it is very necessary to have alternative technology and better institutional structures but financial indebtedness of the Indian farmer’s remains an issue of concern. The question therefore remains whether it is the nature of institutional funding in India that is not appropriate or is it the nature of utilization of the fund that needs to be revisited.
Balakrishnan, P., Golait, R., and Kumar, P.,2008, “Reviewing Agricultural growth in India since 1991
Singh, A.K. and Singh, S.K., 2005, “A study of Agricultural Credit, its Sources and Pattern of Utilization.”, Indian J. of agri . Econ.
Krishnamoorthy, D., 2008, “Dimensions of Farm Credit in Dharwad District of Karnataka”
Golait R., 2007, “Current Issues in Agriculture Credit in India: An Assessment’, Reserve Bank of India occasional Papers, Vol. 28, No. 1, pp: 2
1 Singh Punjab, “Indian Agriculture Development in Changing Scenario-Past, Present and Future”.
2 Samaj Vigyan Shodh Patrika, Special Issue( Uttarakhand-I) 2007.pp66
3 Golait Ramesh, ‘Current Issues in Agriculture Credit in India: An Assessment’,Vol. 28, No. 1, Summer 2007
4 Planning Commission,‘Mid-term Appraisal Eleventh Five Year Plan 2007-2012’
5 Refers to producing enough to meet the local needs using a wide variety of ‘organic’ techniques.
6 Mishra Srijit and Reddy D. Narasimha“Persistence of Crisis in Indian Agriculture”
7 Challa O, Ramamurthy V and Venugoplan M.V, ‘Dynamics of Land Use in Relation to Green Revolution in India’.
8 Zamindars of that period; they often changed over to cash crops for external market.
9 Samaj Vigyan Shodh Patrika, Special Issue( Uttarakhand-I) 2007.pp66
10 Singh Punjab, “Indian Agriculture Development in Changing Scenario-Past, Present and Future”.
11 The Hindu: Survey of Indian Agriculture 2004, p-41
12 Op cit
13 Fujita Koichi, ‘Green Revolution in India and Its significance in Economic Development : Implications for Sub- Saharan Africa’ p.3-6
14 Gomathinayakam, P.1996. The Organic Farming Source Book, the Other India Book Store, Goa, p.84-86
15 By The Sanhati Collective,January 15, 2012
16 The Hindu: Columns/Sainath: In 16 Years, farm suicides cross a quarter mill
17 By The Sanhati Collective,January 15, 2012
18 International Farmers Suicide Crisis, p-2 retrieved from www.un.org/esa/sustdev/csd/csd16/PF/.../farmers_relief.pdf
19 The Hindu: Columns/Sainath: In 16 Years, farm suicides cross a quarter mill