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Analysis of Farmer Suicides in Kerala

The agrarian crisis and farmers' distress in Kerala are closely linked to the neoliberal policy regime implemented in the country in the recent past. The association between the two is more in the regions of the state that are heavily dependent on export-oriented crops such as coffee and pepper. The worst affected are the small farmers, as they are more vulnerable to crop losses and price declines. Unless the plight of farmers is addressed in terms of changing the macro-policies regulating taxes, prices and imports, the condition of the farmers cannot be improved on a sustainable basis, either by increasing the availability of institutional credit or providing some alleviatory sops to the victims of suicide families.

Analysis of Farmer Suicides in Kerala

The agrarian crisis and farmers’ distress in Kerala are closely linked to the neoliberal policy regime implemented in the country in the recent past. The association between the two is more in the regions of the state that are heavily dependent on export-oriented crops such as coffee and pepper. The worst affected are the small farmers, as they are more vulnerable to crop losses and price declines. Unless the plight of farmers is addressed in terms of changing the macro-policies regulating taxes, prices and imports, the condition of the farmers cannot be improved on a sustainable basis, either by increasing the availability of institutional credit or providing some alleviatory sops to the victims of suicide families.

S MOHANAKUMAR, R K SHARMA

F
ollowing the reports of farmers’ suicides from various states in India, particularly Kerala, Karnataka, Andhra Pradesh and Maharashtra, farmers’ distress has become a major issue of our time. Even though both state and central governments initially tried to sweep the crisis under the carpet, soon it blew up into huge proportions forcing most commentators to see it as a repercussion of the neoliberal policies pursued by the successive governments since 1991.1 The Situation Assessment Survey of the National Sample Survey Organisation has reconfirmed the gravity of the distress by revealing that 48 per cent of the farmers were indebted and that 61 per cent of them in rural India were prepared to abandon their vocation [Deshpande and Prabhu 2005]. The price fall of primary commodities for consecutive years is viewed as a prelude to economic depression as it had occurred during the 1920s [Patnaik 2002]. The ongoing spate of farmers’ suicides is caused basically due to economic distress rather than psychological and social reasons. Recently, there have been attempts to situate farmers’ suicides in broad theoretical frameworks such as the family stress models and Durkheim propositions of individualisation [Gyanmudra 2005; Mohanty 2005].

Before the fall of the prices of primary commodities in 1997 driven by the global recession, hit hard the farmers in Kerala, the state in terms of the social sector, stood different from other states. It was widely believed that the Kerala economy would not be adversely affected by the new policy regime as the state would gain immensely from the ongoing process of market integration. Such an estimate was based upon certain specificities of the regional economy: (i) nearly 25 per cent of the state net domestic product is accounted for by remittances from abroad [Pushpangadan 2003]; (ii) agriculture-dependent population comprising both cultivators and agricultural labourers constituted only 23 per cent of the total workforce as against the national average of 58 per cent; (iii) contribution of the agricultural sector to net state domestic product is as low as 15 per cent while the corresponding share in India is 22 per cent; and (iv) export-oriented or exportable cash crops including natural rubber accounted for nearly 30 per cent of the gross cropped area in the state [Government of Kerala 2004]. A brief upsurge in the prices of primary commodity during the first half of the 1990s, seems to have confirmed the initial euphoria.

The history of development of agriculture has been one of driving the peasantry from their lands to join the ranks of wage labourers. For capital to thrive, it was essential to see that the small peasantry was transformed into a free labour class: that the labourers should possess no means to engage themselves to expend their labour power in work [Uma Devi 1989]. The cropping pattern, which evolved and developed in Kerala is not an exception to this general pattern, which was purposefully tailored to the demands of the world market. The price crash and the spate of suicides since the second half of the 1990s has been a logical corollary inevitable for any local economy, which is heavily dependent on the world market. It is against the setting that this paper makes an attempt to explain how the price fall of export dependent crops has claimed the lives of many farmers in Kerala since 1997. The paper is divided into two sections. The first section analyses the specificities of the cropping pattern in Kerala with an emphasis on farmers’ suicides. In Section II, different dimensions of the impact of the agrarian distress are discussed based on the information gathered from 35 families in which suicides occurred between January 2003 and October 2004 in Wayanad district. The primary survey was conducted in November 2004.

I Cropping Pattern, Market Integration and Agrarian Distress

Two hypotheses can be advanced in this context: (i) the higher the dependence of a population on agriculture, the greater is likely to be the incidence of casualties; and (ii) the more a crop is integrated with the world market, the higher would be its adverse consequences on the dependent population. Table 1 shows the cropping pattern in Kerala at two time points – 1990-91 and 2003-04 – representing the situation immediately before and after the implementation of neoliberal policies. Four important observations can be made from Table 1: (i) The area under major cash crops, namely, coconut, rubber, pepper, areca nut, coffee, tea and cardamom accounted for 60 per cent of the gross cropped area in the state; (ii) the relative ranking of crops based on the percentage increase in area under cash crops recorded during the reference period indicate among these crops that areca nut (58.18 per cent) topped the list followed by pepper (28.43 per cent), rubber (16.23 per cent) and coffee (12.04 per cent); (iii) the area under two major food crops, rice and tapioca, declined drastically to the tune of 48.65 per cent and 35.70 per cent, respectively;

(iv) the area under banana and other plantains registered the highest rate of increase, by about 66.77 per cent. The observed

Economic and Political Weekly April 22, 2006 decline in area under staple food crops and the enormous expansion in the area of cultivation of cash crops, particularly of the export-oriented crops, conform to the general trend in the cropping pattern of countries, which have implemented neoliberal trade reforms [Patnaik 2005].

The relative share of the state in the national production and the export intensity of four important crops, namely, rubber, tea, coffee and pepper are presented in Table 2. These four crops together accounted for 27.68 per cent of the gross cropped area in 2003-04. As much as 92.15 per cent rubber and 90 per cent of pepper production in the entire country was from Kerala. The state’s share in coffee is 23.22 per cent of total production in India. While the value realisation of domestically produced coffee met from the external markets stood at about 80 per cent, for pepper, the corresponding proportion declined from 72 per cent to 28 per cent between 1999-2000 and 2003-04. More importantly, the export intensity of pepper has been highly fluctuating. The degree of dependence on the export market is the lowest in the case of rubber; in the case of tea, the export intensity was

20.21 per cent in 2003-04.

In this context, it is important to analyse the price movements of these four crops during this period. Table 3 shows the price in nominal and real terms. The analysis of coefficient of variation in prices during the period between 1997-98 and 2002-03 showed that crops with high export intensity experienced wider fluctuations in price than other crops. The coefficient of variation in the price of pepper was as high as 50 per cent and in the price of coffee, it fluctuated around 30 per cent. Among the four crops considered, export intensity was the lowest for rubber and so has been the volatility in price. In real terms, the price of coffee recorded a fall to the tune of 59 per cent and pepper 69 per cent during the period 1997-98 to 2003-04. On the contrary, the price of natural rubber (NR) registered an increase of 11.09 per cent, the recorded fall in the case of tea has been 41 per cent, thus indicating a strong association between export intensity and price movements. The fall in the price of primary products was associated with a significant drop in the productivity of tea, coffee and pepper (Table 4). Even in the case of rubber, the price fell

Table 1: Cropping Pattern in Kerala (1990-91 to 2003-04)

(area in 00 ha)

Crop Area in Percentage Area Percentage Percentage 1990-91 Share in 2003-04 Share Change in 2003-04 over 1990-91

Cardamom 669 2.22 442 1.50 -33.93 Coconut 8700 28.81 9850 30.41 3.28 Paddy 5595 18.53 2873 9.72 -48.65 Rubber 4116 13.63 4784 16.19 16.23 Vegetables 2211 7.32 1729 5.85 -21.80 Pepper 1685 5.58 2164 7.32 28.43 Tapioca 1465 4.85 942 3.19 -35.70 Coffee 751 2.49 847 2.87 12.78 Banana and

other plantain 656 2.17 1094 3.70 66.77 Areca nut 648 2.15 1025 3.47 58.18 Tea 346 1.15 383 1.30 10.69 Ginger 141 0.47 85 0.29 -39.72 Coca 119 0.39 94 0.32 -21.01 Other crops 3098 12.47 4097 13.87 32.25 Gross cropped

area 30200 100 29544 100 -2.17

Source: Column 2, Statistics for Planning, 2001, pp 35-36. Column 5, Agricultural Statistics 2003-04.

consecutively for five years from 1997. An important difference between the rubber growers and the coffee and pepper farmers is that only 20 per cent of rubber cultivators use family labour while coffee and pepper growers are full time workers in agriculture depending solely on their crops for livelihood [Mohanakumar and Binni Chandy 2005].

It is possible that farmers depending on high export-intensive crops would have been more severely hit than the farmers growing less export-intensive crops. Table 5 gives the relative shares in area and production of rubber, tea, coffee and pepper by districts for the year 2003-04. It is found that more than 80 per cent of area and production of coffee in Kerala was in Wayanad; Idukki with a share of 11.31 per cent was a distant second. It is also seen that 48 per cent of the total area under pepper is concentrated in these two districts. Similarly, 67.55 per cent of the area under tea cultivation falls in Idukki district. Table 6 shows the regional distribution of farmers’ suicides during the period from January 2003 to October 2004. It is found that the suicides were largest in number in Wayanad and was closely followed by Idukki district.

Table 2: Production and Export-Orientation of Rubber, Tea,Coffee and Pepper in India

Year Rubber Tea Coffee Pepper Percen-Export Percen-Export Percen-Export Percen-Export tage of Orien-tage of Orien-tage of Orien-tage of Orien-Production tation Production tation Production tation Production tation in Kerala in Kerala in Kerala in Kerala

1996-97 93.33 0.29 7.76 21.47 23.08 87.80 NA NA 1997-98 92.82 0.24 7.80 25.28 22.22 78.51 80.35 54.97 1998-99 92.41 0.30 8.00 24.08 23.08 80.00 90.58 52.84 1999-00 92.05 0.96 8.12 23.04 22.43 83.90 95.59 72.54 2000-01 91.98 2.12 8.15 23.99 23.44 82.06 95.60 67.20 2001-02 91.91 1.11 7.90 22.43 21.58 68.93 93.50 37.89 2002-03 91.61 8.52 7.86 22.02 23.43 75.27 88.69 32.08 2003-04 92.15 10.67 6.56 21.21 23.22 84.36 96.21 28.27

Notes: Export-orientation defined as the total quantity exported from India as percentage of production in India. NA: Not available.

Source: Col 2, Indian Rubber Statistics, relevant issues; Cols 4,6 and 8, CMIE, February 2004, Agriculture and Economic Review, relevant issues.

Table 3: Price Movements of Important Crops –1997-98 to 2003-04

Year Price in Nominal Terms Price in Real Terms (Rs/Kg) (base 1993-94) Rubber Tea Coffee Pepper Rubber Tea Coffee Pepper

1997-98 34.45 61.57 95.37 174.4 22.72 40.61 62.91 115.04 1998-99 28.56 73.39 82.77 180.9 18.11 46.53 52.48 114.70 1999-00 29.55 62.04 78.72 205.06 18.29 38.40 48.73 126.93 2000-01 29.09 51.34 80.21 124.01 16.70 29.48 46.05 71.20 2001-02 30.81 52.21 49.53 67.45 15.72 26.64 25.27 34.41 2002-03 36.93 47.21 50.71 76.92 19.11 24.43 26.24 39.80 2003-04 48.83 45.78 49.78 68.02 25.24 23.67 25.74 35.17 Mean 34.03 56.22 69.58 128.11 19.41 32.82 41.06 76.75 SD 6.68 9.16 17.67 54.48 3.14 8.31 14.12 38.44 CV(per cent) 19.63 16.29 25.39 42.53 16.17 25.32 34.38 50.08

Notes: 1 Price of coffee is the average of the unit value. In the case of coffee, between 80 per cent and 85 per cent of the domestic production is exported and therefore the unit value of export price is taken. The coffee produced in Kerala fetches a much lower price because it is the cheaper variety called Robusta Cherry and therefore, the price is lower by 20 per cent to 30 per cent. 2 Price deflator used is the implicit deflator of Net State Domestic Product from Agriculture at 1993-94 prices.

Source: Column 1, Indian Rubber Statistics, relevant issues. Column 2, Statistics for Planning 2001and Economic Review 2004. Column 3, Economic Review 2003 and 2004.

Economic and Political Weekly April 22, 2006

Table 5 read with Table 6 confirms a positive association between cropping pattern and degree of market integration measured in terms of export intensity on the one hand and agrarian distress manifested in farmers’ suicides on the other. Thus, the hypothesis that higher the degree of market integration, the higher would be the incidence of casualty is verified. The correlation worked out between the proportion of the labour force dependent on agriculture and the number of casualties by district has shown a significant positive association between the two (Table 7). It is the small peasantry, which is increasingly being affected adversely and the higher their proportion in a region, higher the casualty (Table 7).

II Impact of Agrarian Distress in Wayanad

In this section, major findings from a primary survey of 35 families of suicide victims are discussed. It has already been mentioned that the impact of the price fall of primary commodities on regional economies in the third world countries varies in direct proportion to the degree of dependence of the regional economy on the world market for value realisation of its primary commodities. Thus, the incidence of casualty would rise in proportion to the population solely dependent on the export-oriented crop for livelihood. The relative share of the population dependent on agriculture in Wayanad was as high as 47.44 per cent while the state average was only 23 per cent in 2001. Further, the agriculture sector contributed 21.39 per cent to the district income in Wayanad whereas the share of agriculture sector in NSDP was only 14 per cent. It is also important to note that 12 per cent of the agriculture-dependent population in the state is concentrated in Wayanad while the relative share of the district in the state’s population is only 2.47 per cent. The per capita income of the district was Rs 18,084 at current prices in 2003-04, which was lower by 13 per cent than the average state’s income. All these indicators confirm the correlation between the agrarian distress manifested in farmers’ suicides and the backwardness of the district economy. Adding to the turmoil of the crisis-ridden agriculture sector, actual rainfall in the district also deviated significantly from its normalcy to the tune of 30 per cent. The rainfall was less by 44 per cent in 2002 and 2003 and the prices of cash crops touched their recorded trough point during this period. In the total suicides of farmers reported in Kerala, Wayanad accounted for 47 per cent.

Three variables are considered here: cropping pattern, indebtedness and asset loss of suicide victims’ households. The distressed cultivator households have reported different dimensions of the agrarian crisis, manifested either in the form of huge debts accumulated (on account of price fall or crop loss or both) as the immediate provocation for resorting to the extreme step. The sample households were classified into four size-classes, 0-1 acres; one-two acres; two-four acres and above four acres. It is found that 47 per cent of suicides were reported from smallest size-class of below one acre of land and that the observed trend is an indicative of the fact that farmers with the lowest level of assets were more affected than farmers with larger holdings. The average size of holdings of the deceased farmers was 1.72 acres of land. Their average age was 50 years. It is important to note that the households of the victims did not have any income source other than farming. Cropping pattern: It has already been noted that coffee and pepper are the two predominant crops grown in Wayanad. Among the total holdings surveyed, 96 per cent of farmers reported that they grew coffee and pepper as mixed crops. It was also revealed that the quick-wilt decease infected their pepper plants in the early 1990s resulting in fall in productivity. The decline in productivity coupled with sharp drop in price (from Rs 205 to Rs 65 per kg)

Table 4: Productivity of Important Cropsin Kerala – 1995-96 to 2003-04

(Kg/ha)

Crop 1995-1996-1997-1998-1999-2000-2001-2002-200396 97 98 99 2000 01 02 03

Pepper 358 309 255 376 306 301 286 297 275 Coffee 562 546 570 610 731 832 786 766 754 Tea 1747 1762 2003 1882 1858 1876 1791 1787 1513 Rubber 1443 1529 1583 1599 1612 1612 1612 1635 1709

Source: Economic Review, relevant issues.

Table 5: Relative Share in Area and Production byDistricts 2003-04

(In per cent)

Districts Rubber Tea Coffee Pepper Area Production Area Produ-Area Produ-Area Proction ction duction

Thiruvanant

hapuram 5.94 5.50 2.52 0.44 NA NA 3.19 2.55 Kollam 7.68 7.64 3.52 0.56 NA NA 5.22 4.78 Pathanamthitta 10.00 10.38 Neg. NA NA NA 2.38 1.96 Alapuzha 0.80 0.78 NA NA NA NA 0.92 0.24 Kottayam 23.36 23.31 5.73 0.48 Neg. Neg 4.20 2.61 Idukki 8.02 7.56 67.18 79.55 14.69 10.96 33.89 52.77 Ernakulam 11.89 12.16 0.01 NA NA NA 3.22 1.60 Thrissur 2.81 3.26 1.38 2.20 NA NA 2.29 1.50 Palakkad 6.19 6.25 2.22 4.03 5.59 3.45 2.81 1.27 Malappuram 6.24 6.10 0.50 NA NA NA 4.86 1.47 Kozhikode 3.69 3.90 NA NA NA NA 6.05 2.61 Wayanad 1.39 0.95 16.94 12.74 79.72 85.59 21.55 17.64 Kannur 7.23 7.69 NA NA NA NA 10.21 5.91 Kasargod 4.76 4.52 NA NA NA NA 3.41 3.09

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.0

Notes: Neg = Negligible; NA = Not available. Sources: 1 Statistics for Planning, 2001.

2 Economic Review, 2004

Table 6: Farmers’ Suicides by Districts 2003-04

Sl No Districts Number of Farmers’ Suicide

1 Wayanad 36 2 Idukki 17 3 Thrissur 6 4 Palakkad 6 5 Kasargod 5 6 Ernakulam 3 7 Alapuzha 3 8 Kozhikode 2 9 Kottayam 2 Total 80

(Suicides cases reported in 2003 and 2004). Source: Kisan Sabha, Kerala.

Table 7: Correlation Coefficient

Variable Coefficient (r)

Percentage of agriculture dependent population

and number of farmers’ suicide 0.687 Significance 0.007 Number of observation

Correlation is significant at the 0.01 level .

Economic and Political Weekly April 22, 2006 forced farmers to stop fertiliser application and even other essential cultural practices, resulting in a further drop in productivity. The problem got further compounded by the price escalation for fertilisers brought in by deregulation in 1993-94. A host of interdependent inimical factors trapped farmers in a huge debt burden beyond their capacity to repay in any foreseeable future. It is imperative to examine the impact of the trade regimes introduced at various time points in India since 1991, with respect to pepper and coffee cultivation.

Pepper is one of the export-oriented crops worst hit by the implementation of neoliberal policies and WTO agreements. India is the largest producer of pepper with 25 per cent share in the world production and 13 per cent share in the export market. The export intensity of pepper defined in terms of the quantity exported as a proportion of production is as high as 30 per cent to 40 per cent. Kerala enjoys a near-monopoly position accounting for 95 per cent of the area and production of pepper in the country. Unlike coffee, pepper produced in Kerala fetched a premium price in the international market owing to its intrinsic quality. Taking advantage of the provision of the Rule of Origin under WTO and the Indo-Sri Lankan Free Trade Agreement, low quality pepper was imported into India from other major producing countries, particularly from Vietnam through Sri Lankan ports.2 In fact, the intrinsic premium quality pepper produced in Kerala used to be mixed with the inferior quality produce imported from other countries before they were re-exported to the world market. It is noted that 15,750 mt of pepper was imported into India valued at Rs 1,252 million (Vietnam – 47 per cent; Sri Lanka – 40.46 per cent and Indonesia

– 10.35 per cent) during 2002-03 [Government of Kerala 2003]. The large-scale imports into India resulted in the curtailment of India’s share in the world market by reducing the quantity of India’s exports 42,803 mt in 1999-2000 to 20,000 mt in 2002-03.

Coffee is a high-export intensity crop cultivated in Wayanad as more than 80 per cent of the coffee produced in India used to be exported. India is the sixth largest producer of coffee in the world, with a share of 4.9 per cent in the world market. Kerala accounts for 24 per cent of the total area and 23 per cent of the total production of coffee in India. Productivity of coffee in Kerala was 786 kg per hectare whereas the national average was 866 kg in 2003-04. Further, 95 per cent of coffee area in Kerala is accounted for by an inferior variety of coffee called Robusta.3 Coffee is grown as a small holders’ crop with an average size of holdings of 1.1 ha. The price of coffee in the international market dropped from Rs 95.37 to Rs 50.67 per kg between 1997-98 and 2002-03. The price of Robusta cherry fetched a price lower than those of other varieties of coffee and its price was only Rs 28.54 per kg in 2002. In fact, local farmers received only Rs 20 per kg in the early 2000s. The decline in farmers’ income was further aggravated by the decline in the quantity exported. Land leasing and ground rent: Leasing in of wetlands is gaining fast momentum in Wayanad, as is the case also with other districts in Kerala. The wetlands are leased in for cultivation of banana, other plantains and vegetables by marginal and sub-marginal farmers who have lost their crop in dry land. The agricultural labourers who found it difficult to get employment too leased in land. It is found that 23 per cent of the farmers have taken land on lease in the size-class 0-1 acre category. In the size-class twofour acres, 57 per cent of the farmers took land on lease. Unlike in the past, lands are being leased out by farmers of the same size of operational holdings, but are leased in mostly by those who have a sufficient number of family labourers to be deployed in cultivation. Usually wetlands are leased out on an annual rental basis. The prevailing rent for wetland in Wayanad is Rs 10 per banana plant per annum. Eight to ten plantain trees are planted in an area of a cent (1/100th of an acre) and the minimum size of wetland holdings leased in is 14 cents, standard size of a wetland holding or ‘one parha’ of paddy land. An amount ranging from Rs 1,300 to Rs 1,400 is obtained by leasing out 14 cents of wetland, the amount of rent varying with the availability of water in the holdings. Excluding the wage component of family labour, the cost of cultivation of a banana plant (‘Nentra vazha’) ranges between Rs 35 and Rs 40 and a plantain tree would bear a bunch of fruit, under normal weather condition in Wayanad, weighing about eight to 10 kg. During the harvesting season (December-January) one kg of banana would fetch Rs 7-9. Banana cultivated in Wayanad district is of an inferior quality and it fetches a lower price than prices of good quality banana.

Farmers take cash advance from rural moneylenders for the payment of rent in advance to the landowners, who are also farmers of the same economic class, but possess some amount of wetland, and for meeting working capital expenses including the subsistence cost of their families. The borrowed sum is repaid after harvest and the interest rate varies between 36 per cent and 60 per cent. A higher rate of interest is charged on borrowers of dubious creditworthiness measured in terms of assets. Farmers having one acre or less are charged higher interest rates. The village moneylender mounts pressure on such borrowers for prompt repayment as well. It was reported that if the crop was not infected and was in good condition, and the weather was normal, the farmer would be in a position to pay back the borrowed sum with interest, but would be left with no savings to meet the cost of cultivation for the succeeding season. He would be constrained therefore to borrow again from the same moneylender. This time, the farmer may get the loan without much difficulty. A farmer who leases in land pays on an average a rent of Rs 10,000 per acre of land, in advance and incurs an expenditure of Rs 40, 000 by way of cultivation expenses. The working

Table 8: Farmers’ Suicides by Size Class

Size Class (in Acres) Farmers’ Suicide (Per Cent) Average Size of Holding (in Cents)
0-1 1-2 2-4 4-6 Average 47.22 (17) 19.44 (7) 19.44 (7) 13.90 (4) 100.00 63.29 143.14 283.39 518.25 1.82.00

Note: Figures in the parenthesis indicate number of farmers. Source: Primary survey.

Table 9: Crops Grown by Suicide Victims in Wayanad

(Relative Share)

Size Class (in Acres) Coffee Pepper Plantain Others
0-1 33.66 59.83 6.51 Nil
1-2 71.96 14.57 Nil 13.47
2-4 33.88 Nil 15.17 50.95
4-6 28.94 Nil 22.92 48.14
Percentage of area
under cultivation 38.39 12.88 13.79 34.94

Note: “Others” include six crops, viz, coconut, ginger, paddy, vegetables, fruit trees and cardamom.

Source: Survey.

Economic and Political Weekly April 22, 2006

capital is normally borrowed from different sources and at different times as required by the stage of growth of the crop. More than one source is resorted to because lenders would not lend large sums to a person since such lending involves the risk of nonrepayment in case the crop fails. In 2002 and 2003, there was a severe drought and the consequent crop loss was massive. A lessee of one acre of wetland would be indebted for a sum between Rs 50,000 and Rs 75,000. Having delayed repayment and fallen prey to the moneylender in the event of crop loss during a year, the farmer would never again be able to recoup the loss unless he sells off his landed property itself. Conversely, if a flood or drought has occurred, a lessee of two acres of wetland would become debt ridden worth Rs 1,00,000 and Rs 1,50,000, a debt trap from which he would never escape unless he also sells his landed property. It has been the experience of the farmers in Wayanad to face crop loss due to drought once in every four years for the last decade. When the prices of cash crops fall, the land market too becomes dull and there are very few buyers even at throwaway prices. Indebtedness: Indebtedness is reported to be the immediate reason for resorting to the extreme step of suicides by the aggrieved farmers. Table 10 shows the average amount of debt of farmers by size class and the source of borrowing. The amount borrowed increases with the scale of operation, indicating the long established association between creditworthiness and borrowing. Nationalised banks, cooperative banks, moneylenders and friends and relatives are the major sources of borrowing. Nationalised banks renew loans every year and as a result, the credit-deposit ratio in Wayanad is more than 100 per cent against the state average of 45 per cent. Even though the relative share of village moneylenders in the total borrowings by farmers constituted only 20 per cent, the pressures exerted by them on the farmers were too painful to withstand when compared to pressures by formal sources of borrowing. Farmers resorted to this informal source of moneylenders as the possibility of availing credit from other sources were exhausted. However, the borrowing from public

Table 10: Average Amount Borrowed by Source and Size Class

(in Rs)

Size Class Per Capita Nationalised Loan from Loans from Loans from (in acres) Debt (from Bank Loans Cooperative Money-Friends and All Sources) Societies lenders Relatives

0-1 74574 (17) 33205 (12) 30722(9) 21907 (13) 34222 (9) 1-2 78355 (7) 30524 (7) 18934 (5) 24759 (5) 23270 (5) 2-4 89000 (7) 26800 (5) 74250 (4) 28500 (4) 19500 (4) 4-6 143250 (4) 45750 ( 4) 60000 (2) 80000 (3) 30000 (1) Average 79385 (35) 33183 (28) 39408 (20) 30503 (25) 28018 (19)

Note: Figures in the parenthesis show the number of farmer in each size class who have availed credit. The average figures are arrived at by dividing the total borrowings from each source by the number of farmers who have availed credit from a particular source.

Source: Survey.

Table 11: Distress Sale of Land

Size Class (in Acre) Percentage of Farmers Sold Land Total Area Possessed (in Acres) Area Sold (in Acres) Area Sold as Percentage of Area Possessed
0-1 23.53 10.76 1.56 14.54
1-2 28.57 10.02 0.88 8.78
2-4 28.57 19.84 0.68 3.44
4-6 25.00 20.73 2.00 9.64
Average/total 24.02 61.34 5.12 8.36

Source: Survey.

sector banks and the cooperative sector together continues to be a major source for the farmers in Wayanad. As part of depoliticising the spate of farmers’ suicides, causes of debt accumulation are classified under different heads such as borrowings for treatment, repayment of previous borrowing and conduct of marriage. It was therefore contended that since the borrowings were not for agricultural purposes, debt accumulation and suicides reported as caused by agrarian crisis were in reality the results of social isolation and individualisation. Such a social interpretations fail to take note of the fact that farmers could meet such expenditures with their income from agriculture, which disappeared with the price fall.

Another important dimension of the agrarian crisis is asset loss through the sale of land. The farmers who committed suicides, irrespective of the size of holdings, had sought sale of land for repaying debts. Sale of land is considered to be the last resort of a farmer. In the lowest size class, 23.53 per cent of the farmers sold 14.54 per cent of their total holdings; the area sold as a proportion of the total size of holdings progressively declined in the higher size classes. However, on an average, 8.36 per cent of the total area was sold between 2000 and 2004 by the sample farmers (Table 11). Land was sold exclusively for debt repayment by the large farmers (four-six acres of land). For other three size classes, medical treatment and diseases, marriage of children and cultivation of land were also responsible for land sales. The repayment of outstanding loans from earlier borrowings was reported to be the single-most important reason. In many of the sample cases, suicides were committed immediately on having received a reminder from the bank or following frequent visits of the village moneylender to the farmers’ house.

The family members of the deceased have reported that accumulation of debt beyond their repayment capacity during a few years was the immediate provocation for resorting to the extreme step. Crop loss due to drought was reported to be the reason for suicide for 22 per cent of the farmers who died. Pepper, coffee and banana are annuals and crop losses for a few years in a row had put farmers in greater difficulty even to meet their daily consumption needs. Farmers in Wayanad usually purchase provisions, clothes and other necessaries of life on credit from nearby shops and make payments on the sale of the produce of their annual crops. The crop loss compounded by the price cash also made it difficult for shop-owners to pull on their businesses.

Conclusion

The agrarian crisis and farmers’ distress in Kerala over the past one decade are closely linked to the neoliberal policy regime implemented in the country in the recent past. The association between the two is more in the regions of the state which are heavily dependent on export-oriented crops, such as coffee and pepper. The worst affected are the small farmers, as they are more vulnerable to crop losses and a price fall. They find it extremely difficult to pay back the loans they have incurred to grow crops and survive. Unless the plight of farmers is addressed in terms of changing the macro-policies regulating taxes, prices and imports, the condition of the farmers cannot be improved on a sustainable basis, either by increasing the availability of institutional credit or providing some alleviatory sops to the victims of suicide families.

rr;

Email: smohanan@rediffmail.com

Economic and Political Weekly April 22, 2006

Notes

1 The Situation Assessment Survey of the National Sample Survey Organisation has reconfirmed the gravity of the distress by divulging that 48 per cent of the farmers were indebted and that 61 per cent of them in rural India were prepared to abandon their vocation [Sainath 2005; Deshpande and Prabhu 2005]. The price fall of primary commodities for consecutive years is often viewed as a prelude to economic depression as it had occurred during the 1920s [Utsa Patnaik 2002]. The ongoing spate of farmers’ suicides is caused basically due to economic distress rather than psychological and social reasons. Recently, there have been attempts to situate farmers’ suicides in broad theoretical frameworks such as Family Stress Models and Durkheim propositions of individualisation [Gyanmudra 2005; Mohanty 2005] with a purposeful objective of belittling the devastating impact of neoliberal policies on farming community.

2 The low quality pepper was imported from major producing countries under duty free channel on the pretext of getting value added before they are re-exported. It is important to note that pepper productivity in Vietnam is as high as 1.3 metric tonnes per hectare against 297 kg per hectare in India, which is the lowest among major pepper producers in the world. The productivity of pepper in Thailand is 4.3 metric tonnes per hectare and that of Malaysia’s is 2 metric tonnes per hectare.

3 Interestingly, the production of and area under Robusta variety registered an increase to the tune of 6.1 per cent per annum while the production of the superior variety called Arabica remained more or less static during the period 1995-96 to 2002-03.

References

Deshpande, R S and Nagesh Prabhu (2005): ‘Farmers’ Distress: Proof beyond Question’, Economic and Political Weekly, 44 (45), pp 4663-65.

Government of Kerala (2001): Data Book on Agriculture, Agriculture Division, State Planning Board, Thiruvananthapuram.

  • (2002): Economic Review, State Planning Board, Thiruvananthapuram.
  • (2003): Statistics for Planning, 2001, Department of Economics and Statistics, Thiruvananthapuram.
  • (2004): Economic Review, State Planning Board, Thiruvananthapuram.
  • (2005): Economic Review, State Planning Board, Thiruvananthapuram.
  • Gyanmudra (2005): ‘Farmer’s Suicide: Dynamics and Strategies of Prevention’, Paper presented in the workshop, National Institute of Rural Development, Hyderabad, November 28-29.

    Mohanakumar and C Binni (2005): ‘Impact of Market Uncertainty on Investment and Employment in Rubber Smallholdings Sector: An Analysis of Trends in the Post-reforms Phase’, Economic and Political Weekly, XL (46), pp 4850-56.

    Mohanty, B B (2005): ‘We Are Like the Living Dead: Farmer Suicides in Maharashtra, Western India’, Journal of Peasant Studies, 32(2), pp 243-76.

    Pushpangadan (2003): ‘Remittances, Consumption and Economic Growth in Kerala: 1980-2000’, working paper Series, 343, Centre for Development Studies, Thiruvananthapuram.

    Sainath, P (2005): ‘Falling Farm Incomes, Growing Inequities’, The Hindu, Kerala Edition, Kochi.

    Patnaik, Utsa (2002): ‘Deflation and déjà vu’ in V K Ramachandran and Mathura Swaminathan (eds), Agrarian Studies: Essays on Agrarian Relations in Less Developed Countries, Tulika, New Delhi.

    – (2005): ‘Agrarian Crisis and Distress in India’, paper presented in the International Congress on Kerala Studies, Thiruvananthapuram.

    Uma, Devi (1989): Plantation Economies of the Third World, Himalayan Publishing House, Bombay.

    Economic and Political Weekly April 22, 2006

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