Agrarian Distress and Farmer Suicides in North India

Lakhwinder Singh, Kesar Singh Bhangoo, Rakesh Sharma

• Publisher: Routledge India
• Year: 2019
• Print ISBN: 9780367898229
• eBook ISBN: 9781000721713
• Topic: Social Sciences
• Subtopic: Agribusiness
• Index: Social Sciences

This volume provides a comprehensive and detailed socio-economic overview of agrarian distress in India which has manifested in the suicides of farmers and agricultural labourers. Using empirical research and field data from rural India, especially Punjab, this book examines the underlying causes of farmer suicide and steps which can mitigate the crisis.

Covering nearly 1,400 rural households, the research in this volume identifies the various dimensions of the deepening crisis in agriculture and farming. It categorises the factors of the problem across different regions and estimates its extent and magnitude. In this updated edition the authors focus on instances of political mobilization and collective movements by farmers struggling to bring the issue of agrarian distress to attention. The book also discusses the implementation of state-waivered loans and compensations and their effect on the farming community.

Topical, comprehensive and rich in data, this book will be valuable to scholars and researchers of political economy, agricultural economics, South Asian politics, political sociology and public policy.

1
Introduction to the Second Edition

When India embarked on the era of planned economic development with the first five-year plan in 1950–51, it faced shortages of food supplies due to low productivity and traditional methods of production applied in agriculture. To overcome these food shortages, India attempted several institutional changes, such as land reforms and consolidating landholdings. It also created basic infrastructure, such as a modern irrigation system, a research and extension system and the right mix of input and output markets. The strategies of the green revolution were a success in the state of Punjab – with the productivity of food grains rising many times, especially wheat and rice. This increase happened mainly because of the forward-looking entrepreneurial skills of Punjabis, who were ready to take risks for making investments into agriculture and who were supported by the state while enacting the right kind of institutions and infrastructural facilities.

The ushering in of the green revolution in Punjab initiated multidimensional rural economic development and an agrarian transformation. At the early stage of the agrarian transformation, engineered by technological breakthroughs, the agricultural progress benefited the rural society of Punjab across castes and classes (Bhalla and Chadha 1983). The relative egalitarian impact of agrarian transformation lies in the nature of technological progress that was scale-neutral and labour absorbing. This raised the wage rate and availability of work in agriculture and allied activities (Dhesi and Singh 2008). The state government of Punjab, apart from providing agriculture-related institutional and infrastructural support also opened up educational facilities in each village and health care system. Each village was connected with metalled roads, and Punjab ranked first in providing universal electrification to the villages. These developmental initiatives of the state government made the rural economy of Punjab a model of economic development and symbol of economic prosperity. Punjab has emerged as the state with the highest per capita income and the lowest population below the poverty line among the Indian states and is thus projected as a model of modern rural economic development worth emulating in other parts of India and in other developing countries.

The agricultural progress-based economic prosperity started showing signs of stagnation in returns in the late 1970s and early 1980s and deceleration in returns in the 1990s. Scholars who had examined the economic development process of Punjab had given warning signals with regard to nature of agricultural progress that had specialized in food production without essential linkages with the industrial development of the state (Bhalla and Chadha 1983; Johl 1986; Gill 1988). The agriculture specializing in food grain production using mechanical and chemical innovations reduced the labour demand, but due to diseconomies of scale, small farm production made small and marginal farmers non-viable. Due to the unavailability of the remunerative gainful employment opportunities to both educated and illiterate workforce, turmoil ensued in the rural economy of Punjab. The political leadership successfully converted the economic transition question into a religious one, and consequently, the crisis fell into the hands of the fundamentalist religious leadership. The political instability and turmoil lasted more than a decade and a half (1980–95), and during this period, the existing supportive and developmental institutional arrangements turned dysfunctional. Even afterwards, the restoration of the democratic system could not restore the required institutional arrangements that could have taken Punjab from a predominantly agrarian to an industrialized economy. The liberalization, privatization and globalization phases introduced increasing interventions of market, which has further disrupted the fragile economy of the small and marginal farmers and agricultural labourers. The reduction of the required number of days for agriculture production and the unavailability of work other than agriculture hit hard the household economy of the agricultural labour and made small-scale farming not viable. Therefore, it is important to understand the process of agrarian crisis and its impact on farm labour and small land holders. This chapter is organized into eight sections. The origin of agrarian distress is laid out in the first section. The response of public policy is examined in the second section. The objectives of the study and methodology are laid out in the third and fourth sections, respectively. The procedure of sample selection and scope of the study are outlined in the fifth and sixth sections, respectively. The outline of the book and the limitations of the study are presented in the seventh and eighth sections, respectively.

Origin of agrarian distress

Agrarian crisis and distress among farmers and agricultural labourers are very much linked to agrarian transition and other unresolved agrarian questions. Agrarian transition entails transforming the rural and agrarian economy, for the sake of the overall economic development of the economy, with a capitalistic mode of production and on the basis of a national social formation (Byres 1986). The historically observed pattern of economic transformation shows a shift in income-generating sectors from agriculture to industry. The workforce also received a similar movement of transformation with some time lag. These changes were engineered by technological innovations, which entail conducive institutional, ideological, cultural and societal transformation. If any roadblocks occurred over this course of economic transformation, the state played an important role, even enacting suitable legislation to smoothly transition towards and on the path of modern economic growth (Kuznets 1966). However, the undergoing economic transformation in developing countries, except those in East Asia, is largely confined to sectoral income transformation, and the workforce continues to depend on the agricultural sector of its respective economies. The lack of industrial sector dynamics and non-absorption of surplus workforce of the agricultural sector is the major feature of the character of capitalist path adopted by the developing economies in general and India in particular.

As capitalist development in different social and political formations takes place, the range of substantive diversity has been seen to widen. To understand agrarian distress and rural economic backwardness, the prerequisites are to grasp the nitty-gritty of the agrarian transition and agrarian issues. Therefore, alleviating and eradicating agrarian distress and rural economic backwardness require following a consistent and firm idea about the intricacies of distress and economic backwardness. Although agrarian distress has been the expression of multiple causes, indebtedness and indebtedness-related factors were considered as the most vital manifestation of rural distress and precursor of farmer and agricultural labourer suicides. Indian agriculture has undergone some major structural changes over the period of time (1991–2017), which has enhanced market-induced vulnerability across rural households. The most significant among them are agricultural labour and small-scale and marginal farmers. There has been a dramatic decline in the labour use in the crop sector, that is a 21.4 per cent decline by the turn of the century, as compared with the late 1980s (Sidhu, Bhullar and Joshi 2005). This fall of labour use in the crop sector mainly affected hired labour. The availability of work in the non-agricultural sector has also remained negligible. This is mainly due to the low skill base of the workforce. This is indicative of the fact that 89.68 per cent of the labour households do not have anyone with college-level education (Ghuman, Singh and Singh 2007). Not only did the structural changes in the agrarian economy of Punjab reduce employment opportunities, but low household income also forced them to borrow at a high interest rate, and hence, labour households became indebted. The growing incidence of indebtedness and shrinking opportunities for the labourers led farmers to die by suicide. The growing instability induced by the market forces impacts social fabric of the rural society. As a consequence, the agricultural sector has been progressively acquiring the small farm character,¹ which affected the income and expenditure of the cultivators. Agricultural labourers mainly derive their livelihood from wage employment in agriculture. They constitute about 20 per cent of India’s population and 25 per cent of the rural population. Economically, socially and politically, they are the marginalized, overworked, underprivileged and underpaid section of the Indian population, but they are indispensable to agriculture operations. The growth in the numerical strength of this class is mainly due to the failures of small owner-peasant farming caused by crop failures, sickness, or family misfortunes, loss of land through usurious debts, subdivisions among and fragmentation in land holdings through inheritance and the flow of displaced peasants and artisan workers into the ranks of hired agricultural labour as a result of the decline of handicraft industries.

The agricultural operations are increasingly becoming more and more capital intensive.² The adoption of biological and mechanical innovations has been considered as a necessity for raising output and productivity of the crops sown. The application of these innovations has reduced the use of labour in the production process of agriculture, and availability of work for labour, except during the peak season, has declined substantially. On the one hand, the availability of work for the agricultural workforce has declined in general, and on the other hand, it has increased the financial needs of conducting agricultural operations. Due to the unavailability of regular work for agricultural labourers and growing financial costs in agriculture, this in fact has increased the dependence of the rural workforce on borrowing financial resources. In the near absence of availability of institutional finance, the agricultural labour and small and marginal farmers usually resort to borrowing from non-institutional sources, which usually comes with a high rate of interest and sometimes undervaluing the labour, agricultural goods and assets. Above all, the borrowings require collateral and surety. There is a growing tendency of interlinking agrarian markets, which is exploitative (Gill 2006). This process culminates in increasing the burden of debt in the absence of the capacity to repay loans. This is how agrarian distress originates and deepens over time, especially among small and marginal farmers and agricultural labourers.

Various studies conducted on Punjab show that Punjab farmers remained highly indebted, which is clear from the widely publicized remark ‘a Punjab peasant is born in debt, lives in debt and dies in debt’ (Darling 1925). This was subsequently confirmed by the rural indebtedness survey conducted by the National Sample Survey Organisation, India’s national data collection agency (NSSO 1956). During the green revolution, institutional finance increased substantially, which has given some reprieve to the farmers from indebtedness, but in the 1990s, due to slowdown in the access to institutional credit, farmers again depended on informal lenders and indebtedness. This time, agrarian distress and the rising influence of the informal lenders who have developed large political clout started confiscating the most prized asset of the farmers: the land. This is popularly called as the process of land ‘grabbing’. When the small and marginal farmers faced the threat of losing their only source of livelihood and were rebuked in public by the politically influential and highly organized informal lenders, in the absence of any formal institutional and informal social institutional support, the small and marginal farmers and landless agricultural labourers started dying by suicide. During this period of severe agrarian distress, the large number of farmers of Punjab left agriculture and accelerated the process of depeasantization in the state (Singh, Singh and Kingra 2009).

Agrarian distress: public policy and response

The agrarian crisis surfaced during the mid 1980s in Punjab. It was a manifestation of the stagnation of agriculture, along with falling rate of productivity, rising costs, diminishing family labour in agriculture and rising indebtedness across farming households. These processes of agricultural stagnation more severely impacted small and marginal farmers. Furthermore, it has deepened at a fast pace with the introduction of neo-liberal policies during the early 1990s (Reddy and Mishra 2009a). In the era of the liberalization, privatization and globalization (LPG) policy regime, the policies relating to agriculture have turned against the poor small and marginal farmers, though a handful of resourceful farmers have harnessed opportunities. Neo-liberal policies resulted in decline in public investment in agriculture; freezing of minimum support price of wheat and rice under the guise of food price stability led to a decline in returns and an increase in the number of small and marginal farmers; high borrowing costs for both formal and informal sources of credit and the neglect of agriculture due to the changing agrarian political economy compounded the agrarian distress in the countryside. Distress sale of paddy in the late 1990s and the long wait in grain markets due to non-lifting of paddy by the government procurement agencies, which was done with the objective of encouraging privatization of grain trade and sale, in fact added fuel to the fire to deepen the agrarian distress and triggered farmer suicides. Furthermore, successive failure/damage to crops, especially cotton; price instability of cotton; and increased borrowings by farmer in the hope of revival have landed the farmers, especially small and marginal one, in a debt trap. All these factors pushed the agrarian sector to the wall, and as a result, many farmers and agricultural labourers died by suicide, abandoned agriculture or joined the ranks of labour and other menial workers in rural/urban areas (Nair and Singh 2014). This was the consequence of the exclusionary nature of the neo-liberal economic policy regime. The widespread distress that emerged in the countryside has reflected through growing agitations across the board by the farmers’ and agricultural workers’ organizations. The focus of the farmers’ organizations had remained on the assured purchase of agricultural produce, remunerative prices for their produce and subsidies to ensure the sustainability of the farm sector. However, agricultural workers’ organizations have been asking for better agricultural wages and access to village common resources, which had shrunk tremendously during the LPG period. The focus of the agitation of farmers’ organizations has been on the problems related to relatively well-to-do farmers: medium- and large-scale farmers. These groups have captured the leadership and predominantly been the ones to participate in these organizations. Several reports from voluntary organizations and committees appointed by the government through the National Commission on Farmers gauged the gravity of the situation and recommended steps for alleviating agrarian distress (National Commission on Farmers [NCF] 2006).

The events started going in a positive direction after 2004–05, mainly due to some policy interventions in the wake of pressure from stakeholders throughout the country. Marginal increases have been restored in minimum support prices of agricultural produce, especially wheat and rice. The state also made some improvements in the credit delivery system for agriculture; by cutting the cost of credit by providing 3 per cent subsidy on crop loans as it reduced from 7 per cent to 4 per cent; and by increasing the limit on the amount that can be borrowed with the given level of collateral. During 2008–09, the government also introduced and provided a loan waiver for farmers, especially small and marginal farmers (Gill 2014). There were also some improvements in public investment in agriculture during this period. It was also noticed and observed that due to farmer organizations’ concerted opposition to forcible recovery of debt and, in lieu of debt return, land ‘grabbing’ by the commission agents, the morale of the indebted farmers was raised, which led to a slowdown in the incidence of suicides. This rise in the consciousness among the farmers not to borrow from the informal lenders has reduced the burden of debt, especially from informal sources, and rescheduling loans and interest has also contributed to reducing the incidence of farmer suicides. The rural employment guarantee for providing stipulated days of work under the Mahatma Gandhi National Rural Employment Guarantee Act programme has given gainful work to rural and agricultural labourers. All these factors brought some temporary respite from agrarian distress.

The temporary and short-term public policy has given respite, as was expected, but the incidence of suicides is back. A report stated that two brothers of Mansa district attempted suicide together by consuming poison; one died and the other was battling with death in hospital (Tribune 2014). Their father, 13 years ago, died by suicide arguably due to non payment of his loans and his mounting debt burden. One week later, another report, on 23 May 2014, stated that two farmers in the Bathinda district of Punjab died by suicide due to high debt burden (Hindustan Times 2014). More than 32 farmers died by suicide from two districts alone, namely Mansa and Bathinda, in the first four months of 2014. There is a spurt in the incidence of farmers dying by suicide, as evident from 900 farmers who died by suicide during March 2017 to January 2019 (Chaba 2019). The government of Punjab has undertaken affirmative measures to compensate the left-behind family members of the deceased farmers by paying Rs. 2 lakh. This compensation was disbursed for the first time in 2016. The coverage of this scheme began with farmers dying by suicide during 2000–2013. Thereafter, the government of Punjab authorized the deputy commissioner of the district to immediately compensate a farmer’s family who died by suicide after verifying the cause of suicide as indebtedness. Another measure to giv...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• CONTENTS
• List of figures
• List of tables
• Foreword
• Preface
• List of abbreviations
• 1 Introduction to the second edition
• 2 Perspectives on agrarian distress and rural suicides
• 3 Economic development and rural distress in Punjab
• 4 Farmer and agriculture labourer suicides in Punjab: analysis of the census survey
• 5 Rural households: socioeconomic characteristics
• 6 Determinants of agrarian distress in Punjab: magnitude and manifestation
• 7 A village on sale: microscopic analysis of rural distress
• 8 Summary, conclusions and policy suggestions
• Appendices
• References
• Index