Friday, September 18, 2009

Debt, drought and death

Without a concrete plan, India will surely witness a death rise

Maharashtra is known as an economic power house and the most industrialised state of India. But the flinty reality of farmers committing mass suicides in Vidharbha speaks of two parallel economies with luster of Mumbai’s skyscrapers and flyovers shining down the unkept and unwashed destitute farmers, caught up in debt trap that they cannot get away with. 1,044 farmers committed suicides in 2006 alone in the Vidarbha region causing embarrassment to the government whose efforts till now to save the situation was paltry and minimal. By their own admission, the government did not listen to farmer’s demands; neither had they consulted the local bodies like panchayats to create the relief package. Consequently, it resulted in failing measures with nothing new offered to them, and quite obviously the problem was not solved. Although it is difficult to ascertain exactly how many have succumbed, but the official statistics indicate a figure of 1,920 (out of 3.2 millions cotton farmers, 2.8 millions are debt defaulters). The reason for such augury is the high cost of cotton production in Vidharbha. It is Rs.70 per kg in Vidharbha, where as it ranges from Rs.35 to Rs.48 per kg in the rest of the country! Albeit, the Prime Minister has announced a relief package of Rs.3,750 crore, it is doubtful how much of it will eventually reach the real disadvantaged. This pall of misery is not confined to Maharashtra alone, but it is a phenomenon that is visible throughout the country.

A substantial figure of 1,500 has committed mass suicide in Chattisgarh because of receding water levels, which has gone below 250 feet. Deforestation, inadequate irrigation facilities and unplanned dam projects have resulted in falling water levels. This also indicates the extent of our dependence on right monsoon for the survival of our farmers.

Very recently, much to the shock of the entire nation about 20 farmers killed themselves in Telengana and Rayalseema region of Andhra Pradesh. The same debt trap is the cause as they had taken loans to dig bores and tap ground water that could not be done because the water was at low ebb. This year too, because of insufficient monsoon, 177 out of 626 districts have been declared as "drought-affected" by Agriculture minister Sharad Pawar. The grass root level implementation is often far fetched from the satisfactory level. Moreover, the investment in the sector has come down from 14.9 per cent in the first Five Year Plan to 5.2 per cent in the 11th Five Year Plan one. Investment to GDP ratio too has also plummeted from 1.6 per cent to 1.3 per cent.

Despite huge investments in water resources and irrigation, our agriculture is monsoon dependant. A concomitant phenomenon of risk and uncertainty. It is observed that in a cycle of every four years there would be at least one drought, ensuring the small and medium landowners to be deprived of credit, forcing them to lend money from the land owners, thus falling into the vicious cycle of debt trap. It is true that preparing for unknown is tough, but with drought being a common trend, preparing for the same is inevitable.


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Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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