Jul 21, 2015

Why are Karnataka farmers being driven to suicides? Just look at their income levels from farming.

When Chief Minister Siddaramaiha pleaded: “I beg farmers; I touch your feet and request you not to commit suicide. We will help you in all ways,” he was not only making a political statement but simply showing his exasperation at an unending serial death dance on the farm.

In what appears to be an unprecedented reflection of the severity of a continuing agrarian crisis, more than 50 farmers (and still counting) have taken their own lives since June. In fact, self-immolation by some farmers, a few of them even jumping in the burning sugarcane fields, is seen as an expression of extreme indignation against the apathetic and farmer-unfriendly agricultural policies of the state. Such has been the pace and spate of suicides that Karnataka has suddenly joined the category of farm suicide hotspots of the country.

Karnataka agriculture has always been on a boil. The bubble had to burst sooner or later.

Ignoring warning signals, successive governments had merrily pursued macro-economic policies wherein agriculture had simply disappeared from the economic radar screen. Repeated crop failures, growing indebtedness, and falling incomes had failed to draw attention to the worsening plight of the silently suffering farming community. While the simmering discontent brewing on the farm was very conveniently brushed under the carpet, Karnataka became a hub for emerging technologies and sophisticated equipments.

That such a pitiable situation should exist in a state which has given the country an idea to integrate the existing APMC markets through a common e-platform, defies economic logic. If establishment of a Rashtriya e-Market Services Private Ltd, a 50:50 joint venture with NCDX Spot Exchange, was helpful indeed I fail to understand why Karnataka farmers are not getting the right price for their produce. Already 55 of the 155 main market yards have been integrated into a single licensing system.

To understand why Karnataka farmers continue to be pushed into the never ending cycle of mounting indebtedness, I tried to take a deeper look to know the economic cost of production and incomes for some major crops. The best detailed cost analysis is provided by the Commission for Agricultural Costs and Prices (CACP) which has a countrywide mechanism to collect, aggregate and analyze agricultural statistics. What is shocking to know is that the net return for many crops is actually in the negative, which means farmers will only end up harvesting losses.

The latest CACP reports for 2014-15 Rabi and Kharif marketing seasons has tabulated gross and net returns based on average of actual costs incurred between 2009 and 2012. Accordingly, the net return from cultivating bajra per hectare is minus Rs 2,669; ragi is minus Rs 9,017; Groundnut minus Rs 843; and for Sunflower it is minus Rs 629. If the farmer is destined to harvest losses, given the low market price available in the absence of an assured procurement structure, I wonder what kind of technological and financial support can bail them out. Giving them more credit, even if it comes from institutional agencies/banks, will push them further into a death trap.

For other crops too, the economics does not look to be attractive enough. Let us first look at sugarcane, a crop for which outstanding cane arrears in Karnataka amount to a staggering Rs 1,300-crore. According to CACP, the net return from cane cultivation in Karnataka is Rs 86, 156 per hectare. This is the highest net income for cane recorded in the country. But sugarcane being a yearly crop, the net return is for a 12 month period, which comes to Rs 7,180 per month. When even this low income is not being paid in time considering the huge cane arrears; the farmer is left with little choice but to end his life. 

In case of cotton, the net income in Karnataka is Rs 14,700 per hectare. For paddy, the net income per hectare has been computed at Rs 10,835; Maize Rs 6,992; jowar Rs 1,604; Tur Rs 9142; for Gram Rs 3,699 and for Safflower Rs 57 only. Cotton is a 6-month crop, which means net income per month is hardly Rs 2,450.  Similarly, net income per month is very low for other crops. These low incomes compare well with the findings of the latest socio-economic survey 2011, which concludes that 67 per cent of the rural population lives on less than Rs 33 a day. The challenge for the state government therefore is to augment farm incomes just like it did for ragi. Providing a higher procurement price of Rs 2,000/quintal (Rs 500 more than the Centre), the state has procured 14 lakh quintals of ragi.

Since the Chief Minister is keen to do everything possible to help farmers, I have two immediate suggestions: 

1. Karnataka should set up a Farmers Income Commission with the mandate to work out a monthly assured income package that a farming family must receive given the geographical location of the farm as well as its production. Farmers are actually carrying the burden of providing cheap food for the population. This has to change. If a chaprasi can get an income of Rs 15,000 per month why a farming family should be made to survive in Rs 3,000 or less in a month?
2. Just like for ragi, the procurement system needs to be expanded for other crops. Karnataka should make investments for setting up APMC markets in 5 kms vicinity of every village. Investments are also required for creating non-farm activities in the rural areas. This means shifting the policy focus to rural investments.   

Farmers deaths: Ire against apathetic, unfriendly agri policy. Deccan Herald, July 21, 2015.

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