Wednesday 16 January 2008

The farm crisis: why have over one lakh farmers killed themselves in the past decade?

Part II of sainath's speech on The farm crisis: whyhave over one lakh farmers killed themselves in thepast decade?

PART II of Sainath's speech:

Right now, as I speak to you, there is a second sadpart ?V we are in the spraying season. There arethree seasons when suicides shoot up. It is notcommon across the year. In some months it is verylow. In the spike seasons they are very high. Thefirst spike comes in the credit season when the farmergoes out in April-May, looking for the money to buy their inputs for the new season, trying to get thatRs. 8,000/- or whatever amount it is. I have coveredfarmers who have committed suicides because they couldnot get Rs. 8,000/- at a decent rate of interest in2003 and in early 2004. Then, I have gone back to myhouse as an urban middle class professional and got aletter from a bank, offering me a loan to buy aMercedes Benz at six per cent rate of interest with nocollateral required. What kind of justice is there inthat society? Where is the humanity, where is thecompassion and, above all, where is our sense ofoutrage? Where is the outrage about this, that I can buy a Mercedes Benz for six per cent rate of interestwithout collateral whereas a farmer who could buy aproductive investment like a tractor is bankrupted bythe terms of loan? There is no fairness in the systemat all.

Credit expansion -- to whose benefit?

The indebtedness of Indian peasants, as I said, hasdoubled and I gave you the figures from some of themajor States. We have been told repeatedly that thereis a massive credit expansion and indeed there is. Ican assure you that it is not going to the farmer. Some of you know very well as to which cooperatives itgoes to and who runs what. All these things are verywell known. What has happened to the creditexpansion? How do you expand credit when you haveclosed 3,500 banks in the rural areas? Rural areashave witnessed the closure of over 3,000 banks between1993 and 2002. And more since then. Private banks areonly now beginning to come in. It was only thenationalised banks which worked in the rural areas. There expansion of food production associated with the'Green Revolution' would actually not have taken placewithout the banks being there and providing the creditfor the farmer to do that. Banks have systemically withdrawn from credit and bank branches have closed down in thousands.

There has been a diversion of credit to the uppermiddle classes, the consumption of all of us in thecities indeed. The so-called Gramina Banks areplaying with tens of crores of rupees in the MumbaiStock Exchange! The undermining and re-defining ofwhat we call priority sector lending has a lot to dowith it. We redefine it. Under agricultural loan, you can buy a Qualis or Tavera or Scorpio or other luxuryvehicle -- as an agricultural loan! Whilenon-agricultural loans go to farmers who paynon-agricultural rates of interest, non-farmers arebuying Taveras or Hero Hondas and Qualis with'agricultural loans' and this at reduced rates ofinterest. This is a very widely documented thing andI could place everything before you. It is also veryimportant in the whole crisis. Agriculture is not an island: Do not disconnectfarming from the rest of what is happening. The cost of living expenses have simply exploded across thisnation. Today, health is the second fastest growingcomponent of rural family debt. Health is the secondfastest growing component because we have the sixthmost privatised health system in the world. If you look at the NSS data, it suggests that nearly one inevery five Indians, nearly two hundred million humanbeings, no longer seek medical attention of any kindbecause they cannot afford it. This is not because of accessibility or distance. It is because they cannot afford it. The same nation boasts of boosting'medical tourism.' But that is the situation.

The farmer is hit on all fronts. The situation offarm labour is even worse. The landless labourers'plight is even worse, but he is not tied to the land(except where bonded). So, the entire series ofprocesses is buffeting the farmers in every case. Last year, Andhra Pradesh started jailing elderlyfarmers who were unable to ay their debts. Now, the APGovernment has called a halt to it. They were put injails for debt. Seventy-four- years orseventy-five- year-old farmers were put in jails, butthat is now being stopped.

India pioneered the concept of 'social banking.' Itwas a Gandhian idea. It was recognised that therewere some operations, some classes of people, who youadvanced loans without expectations of huge profits.Like marginal or subsistence farmers. We havewithdrawn from that idea of social banking. We alltalk about moneylenders. One of the things which I want to tell you is that the face of the moneylenderhas completely changed.

The new moneylenders of the countryside:

Please do not focus too much on your village sahucar. Sure, he is an exploitative creature. He is also avery pathetic creature in the new dispensation. Awhole new class of moneylenders have come to thecountryside. The village sahucar, the small sahucaris committing suicide because his clients arebankrupt. Some clients have migrated and they haverun away and nobody is repaying his debt. Who thenare the new moneylenders? They are input dealers, thepeople who sell seeds and who sell pesticides, fertiliser and other inputs to the farmer.

The people who own the shops that are selling the seeds are millionaires now. When you come topesticides, input costs have simply exploded. Let megive you an idea to prove how major it is. When wespoke about interest waiver, I begged at that time:"Do not do the interest waiver. It will be thecooperative banks that will benefit. If you want to doa waiver, do a loan waiver." After all, we havewaived loans of thousands of crores of rupees for ahandful of industrialists.

A non-performing Who's Who:

Look at your Non-performing assets (NPA) list. It isa "Who's Who" of the Indian industry. Running to tensof thousands of crores. But we could not waive theloan of Rs.25,000 per Vidharbha farmer which wouldhave wiped out 80 per cent of their bank debt. Ibegged at that time when the 'relief package' wasbeing formulated. I said: "It is more packing thanpackage." I said that the cooperative banks wouldtake the money. Indeed, the cooperative banks are, forthe first time in 10 years, on a hiring spree becausethey have so much money. They have got a Rs.712 croregift!

We also gave a moratorium of two years instead ofgiving a loan waiver. What is the result? The two-yearmoratorium comes to an end in March 2008. With theexisting loan plus the pending loan plus the currentloan, the farmer is in for a gigantic shock in March2008. There is no chance of repaying. But we did notdo that. Only in the case of Tamil Nadu, there was amajor waiver. You can reason out why Tamil Nadu wasgiven that privilege. I am very happy that they weregiven that privilege and I just hope that thatprivilege would be extended to all the others and theother Governments do the same.

Input costs now killing:

Input costs have gone up to a point where there is noreturn. If you look at cash crops, you can find it. Iwill just take input cost in respect of seeds. Takethe case of di-ammonia phosphate (DAP). One bag of DAPcost Rs.120 in 1991. It costs four times as much now. Seeds were available at Rs.7 a kilogram of localvariety. I mean, in Vidharbha, local cotton seeds wereavailable for Rs.7 per kilo. You could get the bill(for transactions of that time) even now. Just Rs. 7for a whole kilo. It was Rs.1800 for the BT cotton seed (per 450 gram packet) in 2004 before the AndhraPradesh Government took Monsanto to court. It got theprice dropped down to Rs.725. I give full credit tothe Government of Andhra Pradesh for having taken thataction. Today, the utility prices have gone up;electricity prices have gone up and the farmer isbuffeted by the entire series of price shocks. At thesame time, the output prices have crashed. The littledistrict of Wayanad in Kerala lost Rs.6,000 crore on two products of coffee and pepperwhich are not doing that badly at the global level. Injust four or five years, they lost that much.Somebody else is making the money because they havebeen locked into a trade where the Spices Board, allour institutions, are operating on behalf of theprivate corporations and not on behalf of the farmers.

When I went to the Coffee Board in Wayanad, Kerala,they were very nice to me. The moment I entered theiroffice, the Coffee Board people offered me a cup oftea! That is how they promote coffee. The farmers inthis part of Kerala are growing the coffee. Coffeedoes not grow in most Western climates. Your farmer isgrowing coffee and he gets pathetically less than 10per cent of the turnover of what goes on at the globallevel. In 2001-02, thousands of people were beguiledinto growing Vanilla. Why? It fetched Rs.4300 akilogram at the time - at the start. This is alsoone of the tricks of the corporate farming andcontract farming. It fetched Rs.4300, per kg meaningthereby $100 per kg of Vanilla. That was the price thefarmer got. I do not know what is the exact pricetoday. I think it is around Rs.86 a kg. It is not afluctuation. That is an annihilation. This volatilityhas killed them. However, we have chained our farmersto all these things. Are there solutions tothese problems? Yes, I have not covered a lot ofissues. I can take the questions from you on that.

We can turn it around:

For one thing, I would appeal to you to read thereports of the National Commission on Farmers. Thereis something very important about the reports of theNCF. They have wide acceptance. Almost every majorfarm union in this country has supported it regardlessof party ?V whether it is the Congress or theCommunist or the BJP or the Dravidian parties. Acrossthe political spectrum, people have supported therecommendations of the NCF. Then, what prevents usfrom moving ahead on at least the majorrecommendations? What prevents us from creating aPrice Stabilisation Fund for important agriculturalcommodities the way we have it for petroleum. We do have a Price Stabilisation Fund in the case ofpetroleum. The State kicks in when the price becomesunbearable and withdraws when it stabilises. Whatstops us from using social banking techniques?

There is a rule, a law in this country that 1 per centof all loans (at 4 per cent interest only) has to goto the poorest of the poor. Over the last 10 years, wehave not even fulfilled that one per cent, accordingto the bank unions of this country. The industrywideaverage is 0.25 per cent! We have given no protectionto the farmers against dumping and the Westernsubsidies. We have not sought the revival of theagricultural universities as the National Commissionhas appealed for. We could do a five-year creditcycle. You can give the farmer a loan over afive-year cycle instead of making him go back on hisknees to the corrupt bank manager every six months, every season. In five years, you will have two goodyears, two bad years and one neutral year. So you might manage.

There are many such recommendations which we coulduse. They are really very sincere ones. As I said, itis not politically difficult to get them accepted.They have been accepted across the farming politicalspectrum. You are talking about 600 million peoplehere. There are three broad principles which are onthe larger canvass.

?? First, do not treat agriculture as a headacheor a cancer. It is not. It is central to thelivelihoods of hundreds of millions of people. Wehave to approach it with reverence for what itrepresents.

?? Second, declare agriculture as a publicservice and treat it as such. Those who work inagriculture, they lose out a lot. Average incomes inagriculture are much lower than any other sector. Letthem be compensated for the food they put on ourtable. They lose out a lot. Those remaining in thesector should be compensated by society.

?? Third, let us end the hypocrisy of subsidies.There is no part on the globe where agriculture existswithout State subsidies, without State intervention. In fact, the richer the country, the greater the subsidies -- but they are not going to the farmers -- they are going to the corporations. What we give our farmers does not even qualify for subsidy but aspathetic life supports. Let us not remove them. Let us honour those who put food on our table.

I just want to tell you one thing. Many causes have been advanced why farmers are killing themselves. One is, they are killing themselves to get compensation. This disgusting explanation is in voguein Maharashtra. I do not know what to say about it. What do you do with Rs. one lakh? Do you have a wildparty when you are dead? Another thing is they are called mentally unstable. Well, I might be mentallyunstable and depressed if three people in my familyhave killed themselves and one is starving. However,the Government in its wisdom last year constituted amano vaigyanik dal ( A team of medical experts).Psychiatrists, psychologists, some very good people,very fine people, highly qualified intellectuals, weresent to the villages to find out why the farmers arekilling themselves. They did a lot of research andstudies. Finally, one old farmer got up and addressedthese top doctors from top institutions. He saidtypically in the Indian fashion: "Such an honour to have such big people come to my small village. I honour you. I touch your feet. You have asked us so many questions. You have given us such good advice. You have asked us this question: Do you drink too much? Doyou fight with your wife? You have given us goodadvice. You have said: Do not drink too much. Do not fight with your wife. Do yoga. Remove your stress." He said: "Ask us one more question. Ask us why the farmers of this country, who place the nation's foodon its table, are starving?" There was total silence.One of the doctors told a journalist much later: "Weshut up. There was nothing to say. We had all theanswers but he had the right question."

By P. Sainath

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