Tuesday, October 6, 2009

some...issues to ponder

P. Sainath and Farmers' Suicides in India

P. Sainath is one of India's most exalted journalists today. Last year he was awarded a Ramon Magsaysay Award for "his passionate commitment as a journalist to restore the rural poor to India's consciousness, moving the nation to action". I read Sainath's writing occasionally, and last week I attended a talk by him at the University of California at Berkeley. Here are some of my thoughts on Sainath and on farmers' suicides in India - an issue with which Sainath in intimately connected.

Why Sainath is Important

Today's English educated urban upper middle class India remains almost totally ignorant of rural India. An English language journalist seriously interested in rural India is the rarest of rare creatures. It is therefore remarkable that Sainath has decided to devote his career to reporting about rural India. What is even more remarkable is that Sainath, with his passion and eloquence, has been able to successfully carve out a space for himself in the India's English language media.

For this reason alone, Sainath deserves much acclaim.

Farmers' Suicides: Why Sainath's Analysis is Deeply Flawed

Sainath is a remarkable journalist. However, he does not limit himself to reporting. Though he does not claim any special expertise as a researcher or an economist, he offers a very stark analysis of the problems of rural India. While I agree with some parts of his analysis (the existence of an agrarian crisis, the negative impact of industrialized countries' farm subsidies, etc.), I feel that much of Sainath's analysis is, sadly, deeply flawed.

Sainath's Analysis

The issue most closely associated with Sainath is farmers' suicides. According to him, the story goes as follows.
1. In recent years there has been a huge surge in farmers' suicides in rural India.
2. Farmers' suicides are driven by indebtedness.
3. Rising agricultural input costs are responsible for much of the indebtedness.
4. Corporations, freer markets, and globalization are responsible for the rise in input costs, and hence form the root cause of farmers' suicides.

Thanks largely to Sainath, the issue of farmers' suicides in India has become something of a cause celebre in the global anti-globalization movement today.

The Reality of Farmers' Suicides in India

Sainath's uses data from India's National Crime Records Bureau (NCRB) to support his narrative. According to the NCRB data, the total number of suicides in India has risen from 95,829 in 1997 to 118,112 in 2006, an annual growth rate of 2.4%. Farmers' suicides have increased from 13,622 in 1997 to 17,060 in 2006, an annual growth rate of 2.5%. India's population, meanwhile, has been growning at 1.93% annually (between 1991 and 2001).

Total suicides and farmers' suicides in India (reference)

Farmers' suicides as a percentage of total suicides (reference)

It is evident from the data that the number of suicides in India - whether farmer or non-farmer - has grown only slightly over the last decade, especially when adjusted for a growing population. Farmers' suicides as a percentage of total suicides in India has remained fairly constant at around 15%.

Clearly, it is a false notion that farmers' suicide rates in India have shot up dramatically in the last few years.

Farmers' Suicides in Yavatmal District, Maharashtra

While the notion of a huge surge in farmers' suicides in India is largely false, maybe there are pockets where farmers' suicides represent a serious problem.

Let us take a closer look at Yavatmal District in the Vidarbha region of Maharashtra, considered by Sainath as the epicenter of the farmers' suicide crisis. An investigation into farmers' suicides in Yavatmal District was carried out by Meeta and Ravilochan in conjunction with the Yashwantrao Chavan Academy of Development Administration (YASHADA). The findings were published in 2006 in a book called Farmers Suicide: Facts and Possible Policy Interventions. The following are some of the points in this book.
· Yavatmal District has the highest suicide rate in Maharashtra.
· For the years studied, the total number of suicides in Yavatmal District was 640, 819, 832, 787 and 786, in 2000, 2001, 2002, 2003, and 2004, respectively. In each of these years, suicides of farmers and agricultural workers represented 23, 24, 23, 22, and 30 percent, respectively, of all suicides.
· The researchers conducted case studies of individual farmers' suicides in Yavatmal District. A total of 148 case studies are presented in the book. To give a flavor of these case studies, two are very briefly described below.
1. Case 46. A 45 year old farmer who committed suicide by consuming poison in 2004. He had 3 acres of land. There was a crop loan of Rs. 3,954 taken in 2001 from the Primary Agricultural Credit Society, which remained unpaid. In 2003-04 he spent Rs. 10,000 in treating his wife who was a psychiatric patient at a private clinic.
2. Case 120. A 50 year old farmer who committed suicide by consuming poison in 2004. He had 19 acres of land. There was an outstanding loan of Rs. 33,000 with the Bank of Maharashtra, and another outstanding loan of Rs. 8,000 from the Primary Agricultural Credit Society. In 2004 he spent Rs. 60,000 on the marriage of his second daughter. He used to drink alcohol and also gamble. He was having an affair with his bhabhi (sister-in-law). His affair had been discovered shortly before his suicide.
According to the authors of this study,
We found that while indebtedness was rampant, there was little clarity: was it disabling, to what extent, and who was responsible. On one side, indebtedness as high as 75% has been reported since the early 20th century but it was not considered disabling. On the other side, in the early 21st century, only 14% of the victims had indebtedness that resulted in alienation of land and/or animals. Moreover, we discovered that a loan from a rapacious relative rather than a bank or moneylender was often the cause of economic distress of the victim.
What comes out clearly from this study is that each suicide is a unique and complex phenomenon - the reasons and motivations are varied and multifaceted. To find a single cause, one can certainly try to look for common threads running through the suicides, but one must keep in mind that this is bound to be a substantial oversimplification of a highly complex and multidimensional phenomenon.

Implausible and Plausible Causes of Farmers' Suicides

Sainath attributes farmers' suicides to rising indebtedness. How plausible is his reasoning?

It is true that most farmers who have committed suicides have outstanding loans against them. But can that be isolated as the single most important cause for suicide? The fact is that most farmers who do not commit suicide also have outstanding loans against them. To me, factors like poor farm productivity, medical problems, social pressure to spend lavishly on a daughter's wedding, etc., seem to be at least as important as debt - if not more so - in driving people to suicide.

Sainath's further attribution of blame to economic liberalization, globalization, "the neoliberal agenda", etc., are even more implausible. As can be seen clearly from the NCRB data, the crisis of farmers' suicides is not a nationwide phenomenon, but is visible only in certain pockets. Surely it make sense to look for local factors, not just national or global ones. Nation-wide issues like growing cash crops (instead of food crops) are equally applicable to farmers in, say, Gujarat. So how come there are so few suicides among cotton farmers in Gujarat?

A much more plausible cause for cotton farmers' distress in Maharashtra is provided by Sharad Joshi, leader of the Shetkari Sanghatana, an important farmers' organization in Maharashtra. According to Joshi, the primary villain is the Maharashtra State Cotton Monopoly Procurement Scheme - a mechanism that makes the state government the sole buyer of cotton in Maharashtra, and despite generous promises, usually pays farmers less than prevailing market prices. Cotton farmers in Gujarat, who, by contrast, enjoy better access to markets, a state government that invests in infrastructure, and access to new technologies, are witnessing unprecedented prosperity.

Suicides as a Development Indicator

Every suicide is an incredibly sad event. However, a basic question that must be asked is: how valid is suicide rate as an indicator of human development?

Comparison of suicide rates

According to Jean Dreze and Amartya Sen, both eminent developmental economists,
The relevance of the suicide rate as a basic development indicator is far from clear. Indeed, many countries with high suicide rates (e.g., the Scandinavian countries) are doing extremely well in terms of overall social opportunities, and it would be quite odd to take their high suicide rates as a severe indictment of their development record. Suicide rates do correlate with specific social problems such as high rates of unemployment or divorce ... and it is quite possible that problems of this kind contribute to the high rate of suicide in Kerala. But these problems, such as they are, do not detract from Kerala's achievements in other, more fundamental fields such as health and education, just as - say - Finland's high suicide rate does not detract from its success in guaranteeing extensive social opportunities to its citizens.
Farmers' Suicide Crisis in Perspective

Sainath depicts farmers' suicides as one of the worst humanitarian crises facing India. So here are some statistics to keep things in proper perspective.

1. In 2006, 17,060 farmers committed suicide in India.

2. Every year in India some 400,000 to 500,000 children under the age of five die from diarrhea. Diarrhea and other waterborne infectious diseases can be easily prevented simply by improving the infrastructure for drinking water and sanitation.

3. In India some 35,000 people die every year from rabies, i.e., every year twice as many Indians die from rabies alone as from farmers' suicides. Rabies can be very easily prevented, simply by removing stray dogs from public areas.

4. Some 4,000 people die every year in accidents in the Mumbai Suburban Railway system alone (Mumbai city's mass transit system). This is just one example of the enormous numbers of accidents and fatalities that plague India's transportation system - a result of woefully inadequate infrastructure and a virtual absence of even basic safety features.

Such statistics (and there are many more) point to the need for more, not less, economic growth and development in India.

India's Agrarian Crisis

While I disagree with Sainath on many things, I do agree with him that India is facing an agrarian crisis.

One need not look for clues to India's agrarian crisis in suicide statistics - there are many other more obvious pointers, such as anemic growth in agricultural output. The plot below of yield-per-hectare of foodgrains in India illustrates this problem.

Foodgrains yield in India (reference)

This figure points to the issue that is at the heart of India's agrarian crisis: after a period of rapid growth during the Green Revolution, agricultural productivity in India has tapered off. As a result, farm incomes are under pressure. This is in sharp contrast to the industrial and service sectors of the economy, which are booming.

Economic Liberalization and Agriculture

In India the government started a process of economic liberalization in 1991, which aimed to move India away from a Soviet-style statist economic model to a much more free market oriented economic model. Anti-globalizers like Sainath blame economic liberalization for the agrarian crisis in India. I disagree completely. I think it is exactly the opposite - that it is not economic liberalization but rather the lack of it in the agricultural sector that is to blame. If increased economic freedom has made Indian industry boom, why should Indian agriculture be denied the same opportunity?

Below are two examples of how economic liberalization can help Indian farmers.

Consider farmland. Farming in India is not a particularly lucrative profession. It is thus no surprise that, according to a major survey, as many as 40% of Indian farmers would like to give up farming if they had a choice. I think it is important to give these farmers the liberty to monetize the most important asset that they possess - their land - and use the capital to embark on alternative ventures if they so desire. Unfortunately, India's stringent and stifling land regulations do not allow this to happen. According to Barun Mitra,
Indian industry can raise capital from the global market on the basis of a prospectus, which promises performance in the future. But Indian farmers can't raise adequate capital on the basis of the land asset which they already possess.... It is critical that the value of the land of farmers, often their only asset, is maximized, and it is made simple to capitalize. The problem facing the poor is not their poverty, but inability to capitalize their assets... Restrictions such as zoning, land ceiling and land use laws, along with unclear titles and poor land records, grossly undervalue land prices. ... The result is a greatly distorted land market. At one end, there are landowners, millions of small and marginal farmers, who can't even know the market value of their land. At the other end, there are the land mafia and speculators.
Consider farm technology. Like any other sector, to increase productivity, agriculture too needs new and innovative technologies. The good news is that recent advances in fields like biotechnology, genetic engineering, etc., offer immense promise. The bad news is that, partly in response to demands from anti-globalization groups, strict restrictions and prohibitions have been imposed on many of these new technologies.

Gail Omvedt, an American-born Indian scholar who married into a farming family in India has this to say,
Behind the appeal of the campaign is a distorted image of farmers ... which depicts them romantically but demeaningly as backward, tradition-loving, innocent and helpless creatures carrying on with their occupation for love of the land and the soil, and as practitioners of a "way of life" rather than a toilsome income-earning occupation. These imagined farmers have to be protected from market forces and the attacks of multinationals, from the seductions of commercialization and the enslavement of technologies...

Farmers may love the land they work on ... But they are people who are trying to scratch out a living, who want a better life for their children and for whom farming is a source of income and not a very good income. They are familiar with hybrid seeds ... They buy them, try them out, and refuse to use them if they do not perform... Farmers are economic actors and capable of making choices.
The way to overcome widespread poverty is to increase opportunities for people to fully utilize their own talents and abilities. I believe that if given the opportunity, most human beings will be able to overcome poverty through their own enterprise and hard work. For this, economic liberalization and better market access are vitally necessary.

This is not to suggest that the market, by itself, is the answer to all problems. Markets need to be well regulated, with regulations designed to increase choice rather than stifle initiative. And social safety nets must accompany free markets, so that people can survive occasional downturns and bad luck, and live through the vicissitudes of "creative destruction".

Story Versus Analysis

Even though I disagree with much of Sainath's analysis, I can see where he is coming from. He is a journalist - a very good journalist - who is on the lookout for a story that a section of his audience can connect with. His urban English newspaper reading audience, immersed in a post-industrial economy, probably has very little knowledge or interest in the nuances of Maharashtra's cotton procurement system, or in serious but mundane problems like stray dogs and rabies. Maybe Sainath's anti-globalization angle is necessary to attract a certain ideologically inclined section of the metropolitan audience.

Sadly this means that reasoned analysis is sacrificed, and good reporting is lost, in the blind rhetoric of anti-globalization.

I hope I will not be caught for plagiarism….as its not my article. However, this is a cut & paste …as I felt it needs greater viewership, though NOT sure whether this C&P exercise would enable wider viewership ??
However, there are a few if and buts about the article !! Though a good one, the conclusions by the author is a bit off-tangent and impractical too. Monetising land or selling his only possession and choosing alternate livelihoods especially for the poor and illiterate farmers is too implausible to say the least !!

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Works at NABARD for poor HH / was Research Affiliate at CDS, Tvm / was Visiting Faculty on microFinance for MBA students NMIMS, Mumbai.