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Why Do Farmers Commit Suicide?

Individuals and communities are under pressure to cope with the changes brought about by a churn in socio-economic conditions. The policies associated with the process of economic liberalisation have imposed a stress on the peasantry leading to suicides. The tragic developments in rural Andhra Pradesh should compel us to draw important lessons for India's agrarian economy.

Why Do Farmers Commit Suicide? The Case of Andhra Pradesh

Individuals and communities are under pressure to cope with the changes brought about by a churn in socio-economic conditions. The policies associated with the process of economic liberalisation have imposed a stress on the peasantry leading to suicides. The tragic developments in rural Andhra Pradesh should compel us to draw important lessons for India’s agrarian economy.


he summer of 2004 was an unprecedented one for rural Andhra Pradesh, even by the dubious standards established in the last two decades when the number of suicides by peasants had risen alarmingly. In a short span of less than two months, between May and July 2004, more than 400 peasants in the state committed suicide. Although peasant suicides have repeatedly occurred in the state in the past, the significance of this round of deaths lay in the fact that they were reported from every single district in the state, barring Hyderabad.

Blaming “drought”, the favourite explanation of do-nothing politicians, simply failed to explain the tragic phenomenon. The fact that suicides were reported literally from every corner of the state (Table 1), in particular, from even the better irrigated districts, exposed the argument that the scarcity of water, depicted in a vague and generally deceptive sense, was responsible for farmers committing suicide. Instead, the stunning sweep of death across the state brought to the fore all that is wrong in the lives of the peasantry.

Death hit farmers in varying agro-climatic zones. Unlike the rounds of suicides in 1987-88, 1997-98 and 2000, when peasants growing particular crops such as tobacco, cotton, chillies and groundnut died, in 2004 death stalked everywhere. No crop was exempted and no section of the small peasantry appeared insulated. The overwhelming proportion of the death toll was among small and marginal farmers and tenant cultivators, who had no claim on the land they cultivated and who paid exorbitant rents to landlords.

What explains the unprecedented number of suicides in such a short duration? Several theories floated in Hyderabad. The theory popular among sections of bureaucrats, politicians and the intelligentsia was that the peasants committed suicide because of the assistance package announced on the eve of elections by the then chief minister N Chandrababu Naidu, who hitherto steadfastly clung to the notion that a relief package for victims would spur more farmers to their death. On June 2, 2004 the previous chief minister remarked that the “unusual spurt” in the number of suicides after Rajasekhara Reddy assumed office was because of the package.

Another explanation was that it was simply because the media, particularly the Telugu language press, was reporting such deaths in a much more systematic manner than before. Some Telugu papers listed the number of suicides in their district editions. Media observers pointed out that the coverage by the Telugu media was much better when compared to earlier rounds of such deaths. In fact, observers noted that even the English dailies published from state reported the deaths in a more systematic fashion than in the past. However, media critics also noted that there had been no attempt – either by the English language press or the local media – to collate and analyse the information at a broader level to highlight the issues at stake.

However, the most plausible reason for the spate of suicides appears to be related to the fact that farmers were at that time engaged in the task of planning their next crop. May and June are months when they prepare for sowing the kharif crop in late June and July, when the monsoon arrives in most parts of the state. Those sympathetic to the plight of the farmers argued that small and marginal farmers across the state had reached the end of the road. Unable to clear their existing loans or to get fresh loans for the next season, and seeing no hope on the horizon they took their lives, they say.

What explains the phenomenon of a sharp increase in the incidence of suicide among the peasantry? The consensus among psychiatrists and social scientists who have explored the phenomenon is that a substantial “dislocation” of livelihoods drives a community to despair and eventually suicide. Although the phenomenon of suicide is a deeply personal and individual act, suicidal behaviour is determined by a confluence of factors. These are basically in two domains. One, the internal domain, relates to factors which operate at the level of the individual. The other is external, which suggests that larger social processes determine suicidal behaviour. It places emphasis on broader society-level changes, as being responsible for deaths by suicide. The reasoning is that individuals, unable to cope with the social churn in which they find themselves, resort to suicide. Of course, this is accentuated when such a churn is also accompanied by widespread economic distress.

The evolution of the modern understanding of suicides and suicidal behaviour has been to marry the externalised and the internalised views. Diego De Leo, psychiatrist and former president of the International Association for Suicide Prevention (IASP), explains that this understanding has come a long way from the early 19th century view that equated suicidal behaviour with insanity. Two concomitant revolutions in the late 19th century – one in the field of sociology, associated with Emile Durkheim (1951), and the other, the psychoanalytical movement led by Sigmund Freud, have been synthesised in the modern view of suicide and suicidal behaviour.

The phenomenon of suicide is therefore widely regarded to be a result of individuals’ inability to cope with sudden and cataclysmic changes in socio-economic conditions. It is not without significance that the highest suicide rates are those prevailing in the countries of the erstwhile Soviet Union, where calamitous changes in living conditions have occurred in the last decade and more.

Economic and Political Weekly April 22, 2006

The phenomenon of the widespread incidence of suicides among peasants in India is of fairly recent vintage – certainly not more than two decades. Although Andhra Pradesh is the leader of sorts in this respect, the phenomenon is by no means confined to that state alone. Suicides by peasants have been reported from Karnataka, Maharashtra, Kerala, Punjab, Rajasthan, Orissa, Madhya Pradesh, among several other states of the Indian union. Crucially, if it is accepted that the phenomenon of suicides is driven by dramatic changes in socio-economic conditions, then one has to examine what in the lives of the peasants has changed so dramatically in the last two decades as to have pushed them to take their own lives.

While it is foolhardy to pin a single factor as causing peasants to take their own lives, it is becoming clear that the set of policies unleashed by economic liberalisation in the last decade have played a significant role. The fact that Andhra Pradesh has been, until recently, a leader in this respect among all the states of the Indian union, is also not without significance.


The rural economy in Andhra Pradesh is in the throes of a severe crisis. Although the drought-hit regions of Rayalaseema and Telangana have borne a greater part of the strain of the crisis, it is evident that even farmers in the irrigated tracts have not been spared. Moreover, small and marginal farmers, tenant cultivators and agricultural workers have borne most of the burden of the crisis. Suicides by peasants are only the last step of desperation, apparently driven by the growing burden of debt. However, this does not reveal the fact that agricultural activity has not only become more unstable and unviable for large sections of the peasants. Indeed, the failure of the state to act despite repeated media exposures of kidney sales or of starvation deaths by desperate peasants is only indication of the manner in which the state has ignored warning signals of desperation from the peasants.

Frequent droughts, although a significant feature in Rayalaseema and Telangana, is only one aspect of the problem. Soil degradation and inappropriate agricultural practices; rising cost of inputs; wild fluctuations in farm output prices; and rising indebtedness are other aspects of the problem. Indebtedness, in a desperate situation, is the proverbial last straw on the back of the peasantry. Indebtedness, often described as the proximate cause of suicide, is only symptomatic of the larger malaise that afflicts agriculture and its practice in the state. Case studies of suicide victims reveal these multiple facets of the problem (see Appendix for one such case study).

The general deterioration of conditions in which the peasant practices agriculture has been accentuated by the withdrawal of institutional support for activities that are essential to agriculture. Conversely, this has meant that the peasant has been forced to seek private sources to provide these support services. For instance, the decline of institutional credit and adequate insurance has meant that the peasant has had to depend on moneylenders for their credit needs. There are also indications that the market for credit, land and inputs are getting more integrated, implying a greater squeeze on the peasantry. The agrarian crisis has been accentuated by stagnant employment; while agricultural employment has declined, opportunities for off-farm employment have also been stagnant. This is reflected in not only a decline in consumption but also increasing migration.

The shift in cropping pattern, as can be seen from Table 2, indicates an apparent dynamism in agricultural performance in Andhra Pradesh. It is evident that peasants across the state have shifted away from traditional rain-fed cereal crops to non-food cash crops. Much of the shift has occurred in the recent past.

Millets and other inferior cereals have given way to oilseeds, cotton and chillies. This shift has obvious implications for the peasantry. Non-food crops imply a greater extent of dependence on cash incomes not only for cultivation but also for selfconsumption. The greater dependence on monetised inputs, such as seeds, fertilisers and pesticides also meant increased recourse to borrowings. Very often the source of credit was also either a supplier of inputs or a landlord who leased out his land to the cultivator. The cash borrowings ensured further integration into the cash economy because the peasant had to repay the cash loans which commanded usurious rates of interest. This shift also ensured that the peasant could not get back to the earlier situation of growing subsistence crop, the market for which may also have collapsed in the new situation of a cash-governed crop economy.

The agrarian crisis is reflected by the declining growth rate of agricultural output in Andhra Pradesh. The rate of growth of agricultural output declined from 3.4 per cent per annum in the 1980s to 2.3 per cent per annum in the 1990s. Moreover, agricultural crop yields also grew at a slower pace. For instance, the growth rates of rice yields declined from an annual rate of 3.1 per cent in the 1980s to 1.3 per cent in the 1990s; similarly, cotton yields also slackened, the figures being were 3.4 per cent and

1.4 per cent, respectively in the two decades. Nationwide studies estimate that crop yields in the state declined by 1.8 per cent per year over the 1990s. In addition, the volatility in yields was also greater in the 1990s, implying a greater instability in agricultural performance.

The peasantry’s travails due to the declining agricultural performance could have been offset by better and stable prices. However, the prices of crops produced by farmers in Andhra Pradesh have become much more volatile. This is as much due to the failure of state intervention in the product market as the increasing tendency to be governed by trends in the global commodity markets. It has been suggested that since 1996, falling international primary commodity prices of many crops impacted Indian markets in India even when the actual volume of imports

Table 1: Suicides by Peasants in Andhra Pradesh – May 14-July 9, 2004

District/Region Toll

Coastal Andhra 121 Nellore 21 Prakasam 13 Guntur 36 Krishna 18 West Godavari 15 East Godavari 11 Visakhapatnam 3 Vizianagaram 2 Srikakulam 2 Rayalaseema 85 Chittoor 18 Cuddapah 14 Anantapur 30 Kurnool 23 Telangana 222 Mahbubnagar 27 Rangareddy 10 Nizamabad 28 Nalgonda 31 Medak 32 Adilabad 13 Karimnagar 37 Warangal 27 Khammam 17 Total 428

Source: Andhra Pradesh Rythu Sangham.

Economic and Political Weekly April 22, 2006

did not increase. The mere possibility of such imports, it has been suggested, has dampened commodity prices in Indian markets [Patnaik 2004: 22-26]. Moreover, prices have not only fallen, they have tended to be more volatile. This is particularly true of crops such as cotton and groundnut. In short, prices have proved to be uncertain and undependable.

It is evident from Table 3 that agriculture is in serious danger of being a loss-making proposition for most peasants in the state. Returns from agriculture are either stagnant or in decline for many crops. In addition, returns are also volatile, reflecting the volatility in the prices of agricultural produce. Data from the Commission on Agricultural Costs and Prices (CACP) show that the returns from cotton cultivation per hectare in current prices were, in fact, negative in 1996-97 (implying a loss of Rs 1,641 per hectare for peasants growing the crop in the state); in 1997-98, the average peasant growing cotton in Andhra Pradesh made a net profit of only Rs 72 per hectare. These figures are likely to be wrong because of the widely held perception that the CACP underestimates various elements of cost in Andhra Pradesh. Thus, the real situation may be far worse than that revealed by the CACP data. Significantly, while yields have stagnated, and when farmers have been unable to command better prices, prices of a range of agricultural inputs have increased sharply.

It is but natural that the poor agricultural performance, combined with falling incomes, has had their adverse impact on the peasantry. The proportion of gross domestic product (GDP) originating in agriculture in Andhra Pradesh declined much faster than at the all-India level. Moreover, the per capita GDP in agriculture, measured in constant terms, has barely increased since the mid-1990s and, in fact, has actually fallen in recent years. While aggregate per capita income increased somewhat since 1993, agricultural income per capita of rural population has either stagnated or actually fallen. In fact, between 199394 to 1995-96 and 2001-02 to 2003-04, per capita GDP originating in agriculture actually fell sharply, by about 12 per cent.

Impact of Liberalisation

The emphasis on the impact of shortage of water, often nonchalantly labelled “crop failure”, misses the point that far too many things are wrong with agriculture. Over the past 10-15 years, the state has stepped back from its role as a promoter of agriculture. Significantly, the state has not only vacated the space that truly belongs to it as the custodian of the poor and marginal farmers, but actively facilitated the entry of the landed gentry to occupy this vital space. This is felt in every aspect of the agricultural sector in Andhra Pradesh today.

The package of a liberal regime, unbundled in 1991 at the national and state levels, had adverse impact on the peasantry in Andhra Pradesh, just as it had for the peasantry in other parts of the country. It is significant that agriculture has been impacted without the union government actually implementing a set of policies specifically targeted at agriculture. Although the present Congress government in Andhra Pradesh has initiated a series of measures to stem the tide of suicides in the state (and, it appears to have halted the march of death at least temporarily), the failure to recalibrate policy at the national level may have the effect of neutralising these measures.

Here we need only recount those aspects of the liberal regime which have a bearing on the way agriculture is practised, and its consequences for the peasantry. It has worked in two ways. First, it has worked on the logic of “freeing” agricultural product markets, based on the argument that this would only be beneficial to farmers. This has been crucially located in the logic of aligning Indian agricultural product prices to those prevailing globally. This rationale has been that this is required as part of its commitments made to the World Trade Organisation (WTO).

Secondly, the regime has had the effect of releasing control over the terms on which peasants access inputs. These inputs, ranging from power to pesticides have gone outside the ambit of state control. It is significant that in this respect, there has been a coincidence of interests among both the central government and the states. Nowhere was this more evident than in Andhra Pradesh, at least as long as Chandrababu Naidu was in power [Sridhar 2004].

However, the reorientation of government spending priorities, particularly the fiscal realignment, has reached government expenditures on rural development and has affected agriculture adversely. The impact of financial liberalisation has also affected the terms on which public financial institutions lend for agricultural operations. This is not without significance for large sections of the peasantry in the state. The single most important cause for death due to suicide by peasants has been the high cost of debt. That, in turn, has been caused by the increasing recourse to borrowing from private moneylenders, often on usurious terms.

The liberal package of the union government in the field of agriculture has caused expenditures on rural development to fall. The reduction in subsidies for fertilisers has been accompanied by the withdrawal of state support for agricultural extension services. Decline in investments in public infrastructure such as energy and irrigation has also resulted from the fiscal squeeze. Financial liberalisation, including the redefining priority sector lending by banks, has effectively curtailed the public institutions’ ability to make available rural credit, which made investment more expensive and difficult, especially for small and marginal peasants. The fact that such moneylenders also double up as suppliers of inputs such as fertilisers, has heightened the dependence of peasants on these agents, often resulting in desperation when they are unable to repay their dues. In fact, suicide resulting from an inability to repay their dues to these agents appears to be the typical feature of agriculture in Andhra Pradesh.

Things would not have been as bad if the policies of the state government were different from those unleashed in the rest of the country. In fact, however, Andhra Pradesh took the lead in pushing forth the liberal agenda, under the auspices of agencies such as the World Bank. During the last decade the state

Table 2: Changes in Cropping Pattern

(Per Cent of Cropped Area)

Crops North Coastal Andhra South Coastal Andhra Rayalaseema South Telangana North Telangana Total State
1958 1998 1958 1998 1958 1998 1958 1998 1958 1998 1958 1998
Foodgrains 66.90 54.40 72.10 65.40 44.40 23.60 64.40 62.50 74.20 60.60 73.10 53.20
Groundnut 7.10 9.50 3.60 1.80 20.30 48.30 10.50 9.50 8.00 5.30 10.50 15.30
Oilseeds 11.30 12.90 6.30 3.70 21.40 56.30 19.50 20.30 15.10 10.80 15.30 20.80
Cotton 0.20 0.70 0.80 7.00 7.90 5.20 0.40 8.20 4.00 17.60 3.10 8.20
Others 21.60 32.00 20.80 23.90 26.30 14.90 15.50 9.00 6.70 11.00 11.60 17.80
Source: S Subramanyam (2002).
Economic and Political Weekly April 22, 2006 1561

government in Andhra Pradesh systematically reduced the role of public investment, intervention and regulation. Private agents were expected to fill the vacuum caused by the withdrawal of the state.

The decline in public investment in agriculture led to a sharp deceleration in the growth of fixed capital formation in agriculture in the 1990s. This is especially striking when seen in the context of the high rates registered in the 1980s. It is not surprising that the area covered by public sources of irrigation, namely, canals, declined in the 1990s. It is also significant that despite the hype of the Naidu’s regime, no new major irrigation project was taken up in its tenure extending over nine years; in fact, several projects pending were not even completed.

Resources for irrigation, already scarce because of the fiscal squeeze, were thinly spread over a large number of watersheds instead of making an intensive effort to make investments more effective and worthwhile. The reforms in the electricity sector, assiduously promoted by the World Bank, caused a sharp increase in the cost of power in the state. Although farmers paid only a flat rate (which increased from Rs 50 to Rs 300), they had to incur heavy losses due to erratic power, low voltage and burned motors.

Although more than 10,000 water users’ associations (WUAs) were constituted (about 80 per cent in the minor irrigation sector), the bulk of the area covered is under canal irrigation. Moreover, irrigation charges were increased by more than three times since 1997 even though the surface water rates cover merely the maintenance charges. In contrast, those depending on lift irrigation, particularly in the drier tracts of the state – mainly in Rayalaseema and Telangana – bear the full capital cost of the well or bore.

The bulk of the incremental addition to irrigation capacity in the last 10-15 years has come from well irrigation. This means that the burden has fallen on individual farmers. It is obvious to those who have followed the agrarian crisis that the depletion of groundwater resources in areas such as Telangana heaped a disproportionate burden on those who had made risky investments in irrigation. Farmers in this region have repeatedly made heavy investments in bore wells and failed miserably (see Appendix). The state has not only failed to provide irrigation facilities, but actually imposed a squeeze on credit for such purposes when it was needed the most. As a result, peasants, in a desperate search for water, have had to borrow at usurious rates of interest.

The field of agricultural research and extension had also been under prolonged neglect. In 1992-94 the extent of government investment in agricultural research and education in the state, measured in terms of expenses in relation to the GDP originating in agriculture was a mere 0.26 per cent, compared to the all-India level of 0.49 per cent. The level in Andhra Pradesh was much lower than those prevailing in the other southern states. Expenditure on public extension services, mainly borne by state governments, declined in absolute terms in the 1990s in Andhra Pradesh. This was only 0.02 per cent of the state’s GDP during 1992-94, compared to the all-India average of 0.15 per cent. Indeed, there were attempts to privatise extension services in the state.

The complete collapse of the machinery for providing agricultural extension services, combined with the closure of avenues for drawing credit from institutional sources, exposed small and marginal peasants in the state to the caprices of private moneylenders and input suppliers, more often rolled into one. The freedom that these players enjoyed, remaining outside the purview of any state control, made matters worse for the peasantry. The frequent complaints of poor quality seeds, pesticides and fertilisers have to be placed in this context.

Although the feature of a full-blown agrarian crisis was already evident, the department of agriculture in Andhra Pradesh issued a white paper in 1999 stating that the government could act only as a facilitator. It said that no public investment would be forthcoming to provide for these essential services. It pointed out that it would not fill up the more than one-fourth of the sanctioned posts that were vacant, claiming that the government did not have “resources to employ any more extension workers.” Instead, the department proposed to wind up the entire cadre of agricultural extension officers. It envisaged that extension services would be promoted through the private sector, by taking either the unemployed or retired employees. The burden on the AP Seed Corporation would be reduced by making the private sector more accountable through appropriate memorandum of understanding (MoU). The hiring of agricultural machinery would be encouraged through the corporate sector, NGOs and others. Soil survey, soil conservation and collection of market information were to be “encouraged to be developed in private sector with appropriate policy incentives.”

It was but natural that in keeping with this world view of the state government, a number of public institutions catering to the needs of the agricultural sector were either undermined or completely closed down. The government corporations or cooperative institutions, such as the Andhra Pradesh Irrigation Development Corporation, Agro-Industries Corporation, Seeds Development Corporation, cooperative sugar factories, and cooperative spinning mills which were envisaged to help farmers, were closed down, or allowed to degenerate or handed over to the private sector.

The state, by failing to regulate the supply of inputs, has also seriously jeopardised the interests of farmers. Spurious seeds have been a major problem. All that the state has done is to enter into a MoU with seed companies. In reality, the state has no control over the quality of seeds. The large number of suicides in Warangal, for instance in 1997-98, were caused by the widespread use of spurious cotton seeds provided by private seed companies. The problem with seeds is not confined to their quality; farmers now pay much more. Paddy seed prices, for instance, have doubled since 1990; prices of cotton and chilli seeds have increased fourfold during the same period. Similar complaints about adulterated pesticides and fertilisers have been reported from across the state. It is estimated that fertiliser costs have increased fourfold since 1992. The rise in the cost of inputs, apart from the sharp increase in electricity charges during the Chandrababu Naidu regime, has placed the farmer in Andhra Pradesh at a disadvantage when compared to those in other states.

The liberalised policies, which are geared more towards creating a pan-Indian primary commodity market with a unified

Table 3: Net Income Per Hectare in Andhra Pradesh

(at 1971-72 prices)

Paddy Groundnut Sugar Cane Cotton
Early 1970s 314 - 0
Mid-1970s 81 -116 186
Late 1970s -36 -65 1056 638
Early 1980s 150 -15 809 -
Mid-1980s 140 -88 2194 -
Late 1980s 215 -52 816 104
Early 1990s 221 -9 1119 -
Mid-1990s 227 -117 1563 474
Late 1990s 167 -123 1139 -

Source: CACP, quoted by Directorate of Economics and Statistics, government of Andhra Pradesh.

Economic and Political Weekly April 22, 2006

price, in alignment with global prices, have clearly worked against farmers in the state. The cotton farmer in Warangal district, for instance, was cajoled into producing cotton by the state more than a decade ago. Sudarshan Reddy, who conducted an inquiry into the suicides by farmers in the district in 199798, said that the state encouraged the farmer to grow cotton but has since then left him in a lurch. The state did this despite the soil conditions being unsuitable for cotton cultivation.

Rising costs of cultivation have meant that the cost of production of paddy in Andhra Pradesh is higher by about 16 per cent when compared to the cost in Punjab; the cost of growing cotton is higher by more than one-third when compared to that in Gujarat; and the costs of groundnut production is 38 per cent higher in the state when compared to that in Gujarat. Severe fluctuations in the prices of produce have added to the uncertainty in the lives of farmers. Although the state has several agricultural market committees, which are supposed to act as procurement agencies and provide remunerative prices, it is obvious that they are defunct. In 2002, a committee, which conducted an inquiry into the phenomenon of farmer suicides in the state, reported that these committees were procuring an insignificant portion of the total produce in the state.

The burden of the agrarian crisis has obviously fallen on the small and marginal farmers. More than 80 per cent of the landholdings are of sizes up to two hectares and constitute 43 per cent of the cultivated area. Moreover, tenant cultivators with little or no land, pay exorbitant rents to landlords. High rents charged by absentee landlords in coastal Andhra Pradesh, amounting to more than half the annual produce of the farmer, are a serious burden on the peasantry. The rising cost of cultivation, coupled with the risks associated with it, has not only added to the burden on the peasantry but made life uncertain for the poor peasant. The tenant’s plight is worse because, apart from the rack-renting by landlords, he is also totally outside the loop of the formal credit mechanism.

The policies that have come to govern the peasant economy have made the peasant unable to cope with even mild shocks in production, and his plight is aggravated by the state abdicating its role, particularly in extending institutional credit and framing meaningful tenancy laws.

Peasants in Andhra Pradesh, particularly the small and marginal ones, are in the grip of a predatory commercialisation of agriculture. This has changed the face of rural indebtedness. In particular, the “withdrawal of the state” either as a facilitator or as a provider of inputs, extension services or credit has been the key element of the pernicious policies that have wrecked the peasant economy. Of course, the “withdrawal” has not happened accidentally.

The Suicide Phenomenon

The single most striking feature of the last round of suicides was the fact that they were not concentrated in a pocket of the state as on previous occasions. Anantapur district, which is possibly best designated as the “suicide capital” of India, used to be better known until the last round of deaths. It has been estimated that more than 450 peasants in the district have committed suicide since 2000. The district has been hit by a series of droughts in recent years. But that is only to be expected since it generally records the second lowest rainfall in the country (next to Jaisalmer district in Rajasthan).

Groundnut is grown in 90 per cent of the cultivable land in the district. The small and marginal peasant incurs a production expenditure of about Rs 3,000 to Rs 4,000 an acre, but has to bear the uncertainty of crop failure without any assistance from the state. Most farmers in Anantapur grow only one crop, which means that the fields are fallow for 8 to 9 months a year. Less than 10 per cent of the cultivated area is irrigated. The tenfold increase in the import of edible oils has meant lower prices for the peasant, according to leaders of peasant organisations [Sridhar 2004].

Even land prices have dropped dramatically in the past few years. Land in Anantapur, which used to command a price of Rs 40,000 to Rs 50,000 an acre five years ago, now goes for Rs 10,000. Peasants in distress have sold all that they had – cattle, houses and even their land. Many have migrated in the hope of escaping extreme distress.

Even suicide does not appear to relieve the Andhra Pradesh peasant of his debts. Travelling across Telangana and coastal Andhra, I met at least a dozen peasant-families of suicide victims in the summer of 2004. Not a single case was found in which the death provided deliverance from debt. Barely days after the death, the creditors, moneylenders and dealers of fertilisers, pesticides and seeds and even “friends” and “relatives” continued to press the hapless families to clear the outstanding debts of the deceased. Despite the grief, the families were cautious when referring to their creditors. Not a word was spoken in rancour. In fact, it appeared that they were at the mercy of the lenders like never before.

The policies have not only effected a quantum jump in the cost of crucial inputs such as power, but allowed full play to seed, fertiliser and pesticide dealers. A crucial part of the “package” has been the peasant’s lack of access to credit from institutional sources – nationalised banks, cooperatives and specialised rural banks. Credit from these sources has been virtually frozen in the last few years.

Prices of inputs in Andhra Pradesh are among the highest in the country. That is not difficult to fathom, considering the fact that the input suppliers are also the chief suppliers of credit to farmers. Credit furnished by private sources is rarely extended in cash. Inputs are supplied and these are “adjusted” against borrowings already made by the peasant. This implies that the borrower has virtually no control over determining the price or quality of the inputs.1 It has been pointed out that the government had not even deployed geologists to help farmers in their search for water, after failing to provide either institutional credit or an insurance scheme to protect farmers from the enormous risk that they have to undertake in their desperate effort to locate groundwater. Local residents said “water diviners” are having a field day.2

It is important to situate the ongoing agrarian crisis in the context of the statistical fact that more than 80 per cent of the landholdings are about five acres (two hectares). Although some have argued that the crisis in agriculture has affected sections

Table 4: Institutional Credit in Andhra Pradesh

(Rs crore)

Year Crop Loans Term Loans Target Actual Actual as Target Actual Actual as Percentage Percentage of Target of Target

1998-1999 4,115 3743 90.96 659 749 113.65 1999-2000 4,500 4451 98.91 737 932 126.45 2000-2001 6,019 4184 69.51 906 417 46.02 2001-2002 7,500 6124 81.65 1200 689 57.41 2002-2003 8,600 6332 73.62 1345 593 44.08 2003-2004 9,667 7902 81.72 1515 733 48.38 2004-2005 11,205 1814

Source: Andhra Pradesh Cooperative Bank, 2004

Economic and Political Weekly April 22, 2006 of all the middle and rich peasantry in parts of the state, it is obvious that the small and marginal peasant and tenant cultivators have borne the brunt of the crisis, particularly that of the collapse of institutional credit. It is evident that the advances made by formal sources of credit in the last few years have fallen far below the targets that they set for themselves (Table 4). The shortfall is obvious, particularly in the release of term loans. One of the main components of such advances is meant for enabling the peasant to develop irrigation facilities. A substantial part of this, according to bankers, is meant for digging wells. In 2003-04, the government declared that 451 of the 1,127 mandals were affected by drought. In 2002-03, 1,041 mandals were declared drought-hit and in 2001-02, 941 mandals were affected by drought. The fact that term lending fell short by about 50 per cent of the target in the three drought-hit years, when the peasants in the state suffered acute water shortage for crops, highlights the gross failure of the institutional credit mechanism. It is obvious that institutional credit failed the peasantry at the time when it was needed the most.

The condition of a tenant farmer is just as precarious as that of the small and marginal landowner. Having little or no land, the tenant is forced to pay high rents to the absentee landlord, who often supplies seeds, pesticides, fertilisers and credit. In the Krishna and Godavari delta areas of coastal Andhra Pradesh, where tenancy is as high as 60-80 per cent of the cultivated area, rents take away more than half of the farmer’s produce. Tenancy is entirely based on an oral agreement called ‘mooza vani kowlu’. There are no papers or proof to show that the land is cultivated by the tenant. The high rents, coupled with rising input costs and the high cost of informal credit, have made life extremely precarious for poor tenants, many of whom graduated from the ranks of agricultural workers in the last few decades. The commercialisation of agriculture and the high rents mean that tenants are unable to cope with even relatively mild shocks in production. Since they have no documents that recognise their rights as cultivators, the tenant cultivators are entirely outside the ambit of the formal credit market. In fact, several of them in the heartland of the green revolution in West Godavari district told me that they were not even able to collect compensation from the government for crops lost owing to cyclones and inundation during the monsoon. They said that their landlords pocketed the money, because they held the land in their names. Tenancy reforms, to feed the poor peasant’s acute hunger for land, are obviously an urgent requirement. But it is not even on the radar screens of the political class. It is not even a demand that is being articulated by the poor peasant, who is hopelessly marginalised and is in utter despair.

It is well accepted, even in government circles, that the credit institutions indulge in “ever-greening” of their accounts. It is known that a substantial portion of loans advanced by institutions are not really “fresh advances”. Frequently, banks or credit cooperatives ask the peasant to clear his/her old dues including interest, upon which they extended the same amount again as a “fresh” loan to the farmer. In effect, the bank merely makes a book adjustment, while managing to show an increase in its credit disbursement. All this despite several studies on indebtedness among small farmers showing that the rate of recovery of loans from small and marginal farmers is higher than that for loans made to large farmers. Banks, increasingly under the sway of the logic of a liberal financial regime, are discouraged from lending to small farmers. The policy appears to be oriented to the logic that it is better to lend to a small number of large borrowers than to a large number of small borrowers.

State Response to Suicides

Till recently, the government’s response to the phenomenon of suicides by farmers was confined to adopting a posture of denial. Even when it was accepted it was repeatedly argued that any relief measure would only cause more peasants to take their own lives. However, since the new government assumed power after May 2004 elections, it has initiated a number of measures. Although the long-term efficacy of the measures remains to be seen, it is generally accepted that they have effectively stemmed the tide of suicides that erupted in 2004.

The Congress government in Andhra Pradesh which assumed office in 2004 has recognised the magnitude of the agrarian crisis and has already made clear its intention to redirect state policy bearing in mind the need and interests of farmers. The cabinet sub-committee report on the causes of farmers’ suicides indicates that the government is already aware of the main forces behind the crisis and the policies required. There are a number of positive measures which the state government has already instituted, which deserve to be noted.

The state government announced an ex-gratia amount of rupees one lakh to the family of a deceased peasant and Rs 50,000 towards liquidation of his/her farm debt. However, observers have pointed out that there are no budgetary allocations to ensure that this happens on a sustained basis. This is now dependent on funds being available with the concerned district collector. It has also been pointed out that the process of identifying deaths by suicide has been excessively bureaucratic in many cases, which defeats the very purpose of the measure. Since the relief measure is available to “farm-related causes”, it is difficult for the members of the victim’s family to prove that a particular suicide death is farm-related. However, the most important move has been the moratorium on loans taken by farmers. A bill was passed in the state assembly in 2004 providing a moratorium for six months on private moneylenders. In addition, the two-year moratorium on institutional credit recovery by commercial banks as declared by government of India is also being implemented. There was also a drive to ensure increase disbursement of credit by the banking institutions.

The deep-rooted nature of the agrarian crisis, resulting from a liberal package initiated in New Delhi, implies that much more needs to be done at the state level to counter the effects of policies in the sphere of agriculture. The crisis in agriculture is so deep and widespread, that in spite of these positive measures, the conditions of farmers remain precarious, as evidenced by the continuing suicides despite various relief measures. Much more will be required to make material improvements in the conditions of farmers.


The act of suicide, or the phenomenon of suicides on a widespread basis, is usually provoked by a churn in socio-economic conditions. Individuals and communities are under pressure to cope with the changes in the conditions of their lives, when society is in a state of flux. This is important in the case of Andhra Pradesh because it has the dubious distinction of accounting for three out of four suicides by farmers in India. Once it is accepted that the growing number of suicides within a community is provoked by sudden or dramatic changes in the terms on which their lives are lived, it is necessary to explore what these changes are and how they have impacted the lives of the community, in this case, the peasantry.

It is becoming increasingly clear that the policies associated with the process of economic liberalisation, particularly since

Economic and Political Weekly April 22, 2006

the 1990s, have impacted the lives of the peasantry in a major way. It has also imposed a stress on the peasantry, which is possibly responsible for them taking their own lives. A one-toone straightforward causal relationship is difficult to establish. However, it is evident that the logic of liberalisation, fundamentally defined as allowing a greater play for market forces, whose corollary is inevitably a “withdrawal” of the state, has added a qualitatively new dimension to the stress on the peasantry. It is significant that the field of agrarian studies has suffered precisely at a time when the peasantry has been the height of its distress. It is therefore necessary to explore the dimensions of distress in Andhra Pradesh on a more extensive basis, particularly with greater field-based exploration. The lessons from such an exercise in Andhra Pradesh could have important lessons for peasants across the country, particularly because of the serious threat of farmer suicides erupting across the country.


Case study: Suicide victim from Warangal district Name: Sunka Mallesam Age: 35 Village: Chilpur Mandal: Station Ghanpur District: Warangal Date of death: May 27, 2004

A crowd is assembled under a shamiana as the priest conducts the ceremony on the tenth day after the death of Sunka Mallesam, a marginal farmer. He tried raising cotton on the three acres that he owned. In order to provide a measure of insurance from the repeated failure of the cotton crop in this part of Warangal district, he also leased three acres and grew maize and paddy on it. His brother Raja Komariah (40) migrated to Khammam five years ago to work as a construction worker. He preferred to leave his three acres fallow and migrate rather than suffer repeated losses like his brother by cultivating the “treacherous crop”, cotton.

Finding water for cultivation was always a problem, and it drove Mallesam to death. Komariah said that Mallesam spent about Rs 30,000 on digging a bore well, laying pipelines and installing a motor in May 2003. Although the bore ran 90 metres deep, there was no water. A desperate Mallesam dug another bore well in January 2004, which also turned dry. By then the total debts he had piled up in trying to procure water amounted to more than Rs 75,000. In what turned out to be a gamble, he invested Rs 35,000 on the cotton crop.

Rajamma (27), Mallesam’s wife, said that he was already burdened by debts incurred in 1998 when their daughter suffered from “brain fever”. The couple had spent Rs 40,000, borrowed mainly from friends and relatives, to treat her. Komariah said that they managed to repay some of the earlier loans but their debts amounted to Rs 96,000 at the time Mallesam took his own life.

Damera Ramanathan (45), whose field was adjacent to Mallesam’s, said that they used to discuss their debts. He said he too had debts, amounting to over Rs 40,000. He too suffered losses because of failed bore wells. Ramanathan said Mallesam had told him that he proposed to migrate to Bhadrachalam to work as a “coolie”. “I persuaded him not to migrate, but I do not know whether I gave him the right advice,” Ramanathan said. They met for the last time 15 days before Mallesam died. Mallesam said he had sold his two bullocks for about Rs 6,000. On the morning of May 27, Mallesam was found lying near his well. Barely conscious, he told a neighbour that he had consumed pesticide. He died soon after.

Ramanathan, who normally grows cotton or chillies on his two acres, said agriculture was laden with risk. “Water is not the only problem”, he said. “A good harvest means poor prices, but a bad harvest is bad in every way”. He sold his chilli crop at Rs 1,200 a quintal in March 2004, but the current price is Rs 4,000. He pointed out that although the official procurement price of chillies had increased to Rs 2,600 from Rs 2,000 last year, his failed crop would not get him anything anyway.

The ruling “market rate” for credit in Chilpur is between 2.5 and 3 per cent a month, which works out to 36 per cent interest on an annual basis. Mallesam’s loans were taken mostly from friends and relatives, but he had also borrowed from a farmer in a nearby village. Mallesam’s father Sunka Venkatiah said that the loan taken from the farmer bothered him more than anything else as the lender demanded early repayment. Mallesam had sought time in the past by signing a promissory note enabling him to rollover the debts. But this obviously could not go on indefinitely. Four days before he committed suicide, Mallesam signed a promissory note mortgaging his next crop and agreeing to pay compound interest on the accumulated debt. His father said: “He must have known that his crop would not fetch him anything. He just ran out of hope.”

Asked if the lenders exerted any pressure in the days before his death, Mallesam’s family is reticent. His neighbours explain that violence was never really needed to recover loans from desperate borrowers. The existence of a cooperative bank at Venkatadripet, 2 km away, does not seem to have been an option for Mallesam. Venkatiah said that most people avoided the cooperative bank because of the threat of attachment if dues were not repaid. Mallesam’s neighbours said that windows of the houses would be broken and taken away and even television antennas would be seized if the loans were not cleared. Nationalised banks located in Ghanpur also do not issue fresh loans if earlier loans are not repaid. In short, public institutions do not offer a flexible repayment schedule when the borrower is in difficulty. In contrast, the private lender is willing to extend credit, but at a very steep price. Even that eventually drives the borrower to a corner. The family also said that it had not received any succour from the government. It fears that the lenders will descend on them if it got anything at all from the government.




1 In parts of Nalgonda district, which reported 31 suicides in the two-month

period between May and July 2004, peasants have dug bore well after

bore well in a desperate search for water. The money advanced by private

moneylenders is paid directly to the rig operators, enabling them to

collude against the peasants [Sridhar 2004a]. An average farmer in the

district, with about three acres of land, had struck at least three or four

bore wells going down to 250-300 feet, each attempt costing him at least

Rs 10,000. 2 One technique, apparently a popular one, involves the “diviner” walking

around the farm carrying a coconut in his palm. The stalk supposedly stands

upright at the spot where the bore is to be drilled. This bizarre technique

even stipulates that the blood group of the “diviner” should be O positive.


Durkheim, Emile (1951): ‘Suicide: ‘A Study in Sociology’ ’, translated by

George Simpson and John A Spaulding, The Free Press, New York. Patnaik, Utsa (2004): ‘It is a Crisis Rooted in Economic Reforms’, Frontline,

21(13), pp 22-26. Sridhar, V (2004): ‘Neoliberalism Spurned’, Frontline, 21(12), pp 23-28.

– (2004a): ‘From Debt to Death’, Frontline, 21(13), pp 13-16.

Economic and Political Weekly April 22, 2006

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