The Economics of Farmer Suicides

Politicians see votes in farmer suicides. Few of them seem to understand the reality that has overtaken farming in India. With almost 60% of the population still dependent on it, Agriculture’s share of the GDP has declined to just 13% and continues to decline fast. Very simply, it means that farming now only ensures greater relative poverty.

To make farming profitable two things need to happen. One is that less people are involved in it and the other is that farm produce gets higher prices.

Only rapid industrialisation will ensure the former and a drastic reduction in the cross web of state interference to curb prices for urban people. Neither is happening in India.

This is a huge challenge, and politicians, be it Narendra Modi or Rahul Gandhi or Nitish Kumar or Arvind Kejriwal, being politicians will always take the easy way out. They will just keep visiting the homes of the suicides, and avoid stating the obvious.

But are farmer suicides more recent phenomena, or has the incidence grown recently? Suicides have been a part of our life since time immemorial. People in all walks of life kill themselves for various reasons. And some people are more predisposed to killing themselves than most.

The incidence of farmer suicides is actually not as high as the protesting decibels would suggest. In fact the incidence of suicides among farmers is far less than the general trend.

The Opposition, led by the recently invigorated Rahul Gandhi, and the ignorant electronic media ever in pursuit of bytes and eyeballs suggest that the government is underplaying this. They all miss the well-established psychological truism that suicide is more a consequence of genetic traits than the environment.

We seem to be swayed by the emotional appeal of the situation and have forgotten that it is always sensible to rely on empirical data.

The National Mental Health Association of the United States of America states that “No matter the race or age of the person; how rich or poor they are, it is true that most people who commit suicide have a mental or emotional disorder”.

There is a suicide baseline, which exists, in good times or bad, suicide is not a matter of economics. This is well supported by the data released by World Health Organisation: while the suicide rate in India, an agrarian economy, was 13 per 100,000; that of industrialised, rich countries were often higher or comparable, South Korea: 28.5, Japan: 20.1, Russia: 18.2, France: 14.7, Germany: 13.5, USA: 12.6, Australia: 12.5 Sweden: 12.0, UK: 11.8, and happiness index linked Bhutan was number 20, with 16.2-12.5. Men usually are more prone by two or three times to kill themselves.

In India, after examining the profiles of suicide victims by profession, one finds that farmers who form 60% of the population account for 15.3% of suicides, while those in the secure service industry (including the Government and Public Sector Undertakings) form 9.8% of the cases!

Suicide-rates indicate that while the poorer states such as Bihar have a per 100,000 rate of 1.85 and Uttar Pradesh 3.02 some richer states such as Gujarat (9.62) and West Bengal (18.45) are more prone.

Clearly there is no correlation between suicide rates and incomes, and if any at all, have nothing whatsoever to do with the farm or non-farm sectors; it is more to do with how people respond and succumb to a social or economic adversity. It’s in their inherited genes.

We cannot deny the grim reality of the countryside, but our politicians tend to overplay the emotional quotient of economic adversity. This comes through as a gimmick for winning votes. In no respect can suicides be used as an index for the lagging economic performance.

In the same regions of the Telugu states and Vidarbha where suicides are reported, there exist millions of other farmers who are in the same or possibly worse situations. Most of them cope up with their adversity and suicide is not the chosen option.

Clearly the issue to grapple is not suicides by farmers, but the economic plight of farmers who have been affected by crop failure and drought.

The problem thus should be analysed using a more holistic approach, keeping in mind a larger perspective. The agricultural sector as a whole is facing major structural problems.

We are witness to the falling share of agriculture in the country’s GDP, from 35% in 1990 to 13% in 2015, the increasing burden on land (267 people per square km in 1991 to 324 people in 2001), and also the “low productivity, low purchasing power, poor infrastructure, a gross inequality of state conferred benefits and a perceptible withdrawal of the state from the agricultural sector”.

Considering the fact that agriculture is still the mainstay of the Indian economy, employing around 60% of the total workforce; this on the whole does not bode well for the country.

The main proportion of the government’s outlay on agriculture goes towards subsidies, which contribute very little to growth today. They benefit the rich farmers the most, while the marginal ones are living on the fringe.

These need to be done away with to arrive at a long-term solution. There is also a need to promote watershed management and massively increase the acreage under irrigation. Presently, only about 35% of total agricultural land is irrigated!

This would reduce their susceptibility to drought and avoid crises. Telangana has shown that increased availability of water to farmers exponentially improves economic growth and prosperity. This is the Telangana model which the arid states of India must emulate.

A move towards the free market and an end to the government’s attempt to jawbone producer prices is required. The frequent resort to the import of wheat at higher prices, only to keep domestic prices low, is proof of this interference.

While a kilogram of wheat retails for Rs.13-15 in India, the same goes approximately for the equivalent of Rs.40 in the USA, Rs. 35 in Brazil, Rs. 50 in Indonesia and Rs. 30 in China. The same trend is noticed for rice.

Low prices of agricultural produce ensure that the farmer’s profit margin is reduced. Unless agriculture is made a more profitable business, neither the poverty nor the indebtedness of the farmer will ebb.

There are other infirmities, which keep most farmers at subsistence levels. The fragmentation of holdings is a major cause, with about 83% of farmers considered small or marginal with less than 2 ha each. This implies that over 80% of the farmers in India hold about 35% of the total cultivated land.

To compound matters there has hardly been any new creation of irrigation potential by the State for the last 25 years. All the additional irrigated holdings of the past two decades have come from private tubewells. Two thirds of our farmlands are still rainfed.

This clearly makes any commercial scale farming impossible and the majority of farmers dependent on the rain Gods and governmental lords.

To reiterate, suicide is a matter of psychology, and not of economics, no matter how tempting that may be to exaggerate an issue. Few can deny that there is a crisis looming over the agricultural sector. To be able to act purposefully we must rely on facts instead of emotions.

The true indicators of the economic conditions are objective measures such as the sectoral share in GDP, availability of cheap credit, increase in area under irrigation etc. and not the farmer suicides. It is unethical to use this as an economic index. But tell that to the politicians?

Mohan Guruswamy is a scholar and an author. Views expressed are the writer’s own.