Farmar Suicides

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WP-2007-014
Risks, Farmers’ Suicides and Agrarian Crisis in India:
Is There A Way Out?
Srijit Mishra
Indira Gandhi Institute of Development Research, Mumbai
September 2007
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Risks, Farmers’ Suicides and Agrarian Crisis in India:
Is There A Way Out?1
Srijit Mishra
Indira Gandhi Institute of Development Research (IGIDR)
General Arun Kumar Vaidya Marg
Goregaon (E), Mumbai- 400065, INDIA
Email: srijit@igidr.ac.in
Abstract
Poor returns to cultivation and absence of non-farm opportunities are indicative of the larger socio-economic malaise in rural India. This is accentuated by the multiple risks that the farmer faces – yield, price, input, technology and credit among others. The increasing incidence of farmers’ suicides is symptomatic of a larger crisis, which is much more widespread. Risk mitigation strategies should go beyond credit. Long term strategies requires more stable income from agriculture, and more importantly, from non-farm sources. Private credit and input markets need to be regulated. A challenge for the technological and financial gurus is to provide innovative products that reduce costs while increasing returns. The institutional vacuum of organising farmers needs to be addressed through a federation of self-help groups (SHGs) or alternative structures.

Key words: Credit burden, Crop loss/yield uncertainty, Market vulnerabilities (price shocks and increasing input costs), Returns to cultivation, Suicide Mortality Rate (SMR). JEL Code(s): D81, O13

1 This is being prepared as a keynote paper for the theme “Risk Management in Agriculture/Rural Sector” for presentation at the 67th Annual Conference of the Indian Society of Agricultural Economics (ISAE) to be held under the auspices of Bankers Institute of Rural Development, Lucknow during the first week of November 2007. The author thanks Professor S. S. Johl and the ISAE for giving him this opportunity. Usual disclaimers apply.

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Risks, Farmers’ Suicides and Agrarian Crisis in India:
Is There A Way Out?
Srijit Mishra
1. Introduction
A popular peasant saying that “abundance of water destroys life; paucity of water destroys life” signifies agriculture’s link with monsoon. The vagaries of nature have been associated with ups and downs in cultivation. In addition, disease and pests can also affect crops. When the produce is good, a glut in the market can through low prices lead to poor returns from cultivation. Increasing cost can also adversely affect returns. Spurious inputs could also leave the farmer in a quandary. The increasing dependence on inputs from the market has also brought about greater demand for credit, which adds another important dimension to the difficulties. There are multiple risks in agriculture – income, yield, price, input, technology and credit among others.

In recent years, one observes an increasing incidence of farmers’ suicides. Suicide being a multifaceted and complex phenomenon, the risks are identified either in the neurobiological or socio-economic domain. The former are predisposing in nature and are internal to the individual whereas the latter are the precipitating ones and are external to the individual. A relatively higher suicide among a particular sub-group is indicative of a larger socioeconomic malaise.

The features of the current agrarian crisis are briefly elaborated as follows. First, there has been a decline in the trend growth rate of production as well as productivity for almost all crops from the mid-nineties. Further, the value of output from agriculture has been declining from late nineties. Second, there is an excessive dependence of a large section of the population on agriculture (in 2004-05 nearly 64 per cent of the rural persons were from households whose members major activity status was either self-employed in agriculture or agricultural labour). This also indicates that rural non-farm employment opportunities are limited. Third, with declining size-class of holding and an increasing...
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