One month’s saving for a farmer: Rs 223
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One month’s saving for a farmer: Rs 223

The numbers are not good for farming households in the country

By Devanik Saha

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The issue of farmer suicides is a sensitive one, especially since it invariably becomes a political debate with leaders pointing fingers at their rivals. Beneath the politics, however, is a story of people trapped in a dire situation. In 2015, Maharashtra recorded 3,228 farmer suicides, the highest in 14 years. Not just Maharashtra, Karnataka, Telangana and Bundelkhand in Uttar Pradesh and Madhya Pradesh, also witnessed a staggering number of suicides.

India has faced two consecutive drought years and the condition of farmers was further worsened by the slowdown in the economy. As many as 11 states had declared drought last year, and horrifying survival stories of farmers and their families have reached us. In Bundelkhand, there were reports of farming families eating rotis made of grass to survive and farmers selling their blood in order to pay back loans. The debt cycle has a deep impact on the farmers’ children as well. Adolescent children who have inherited their parents’ debts are forced to take on adult responsibilities, drop out of school, till the fields, succumb to depression, and in case of girls, get married off early so that the family has one less mouth to feed.

The recently released revised data on agricultural households and incomes by the National Sample Survey Office (NSSO) throws some light on the situation. The survey, conducted in the rural areas of the country, was spread over 4,529 villages covering 35,200 households. The data estimates, pertain to the agricultural year July 2012 – June 2013.

Though this data provides a snapshot of the indebtedness situation of rural households in 2012-13, it is quite possible that the situation may have worsened in the past one year, given successive crop failures and droughts.

Average monthly income of a farming household

The average income of an agricultural household is Rs 6,426 per month and the expenditure adds up to Rs 6,223. This means the average monthly savings amount to Rs 223. The data further reveals that all households that possess less than one hectare of land spend more than they earn, which leads to debt.

The Centre has still not fulfilled the promise made by Narendra Modi in a rally in Jharkhand – of implementing the Swaminathan Commission recommendations. The Swaminathan Commission was constituted by the Central Government on November 18, 2004, and recommended that the minimum support price of crops for farmers should be at least 50 per cent higher than the cost of cultivation.

If implemented, it could make a significant addition to the incomes of these agricultural households.

The share of agricultural activities in the total average monthly income per agricultural household out of the four sources was 60 per cent in rural India. However, this differed considerably between states. While West Bengal reported this to be 30.3 per cent (lowest among states), the highest was Madhya Pradesh at 76.5 per cent.

To supplement their agricultural incomes, people have turned to the Mahatma Gandhi National Rural Employment Guarantee Act scheme and it has seen high demand in rural areas from farmers seeking work. Under the law, promulgated in 2005, each household is guaranteed 100 days of work, every year. However, on an average, each household received only 45 days of work over the last decade, which is less than half the guarantee, as reported by IndiaSpend.

Furthermore, the law also stipulates that wages are to be paid within 15 days. In 2015, 72 per cent of wages were delayed. This year, no more than 45 per cent of wages have been paid on time.

Rs 47,000 is the average outstanding loan per household

A worrying 52 per cent of all agricultural households surveyed were in debt (this includes all kinds of loans, and not just agricultural). Among households with different land sizes, 79 per cent have more than 10 hectares of land and are indebted. Among states, 93 per cent of households in Andhra Pradesh were indebted, which is the highest among all Indian states.

The average amount of loan outstanding per household was Rs 47,000 – ranging from Rs 31,100 for households having less than 0.01 hectares of land to Rs 2,90,300 for those having more than 10 hectares of land.

Over the years, apart from using money for cultivation purposes, outstanding loans for health reasons have increased significantly. Loans for healthcare expenditure have increased from three per cent in 2002 to six per cent in 2012, reveals a National Sample Survey Organisation report. Another survey further revealed that more than 50 per cent of rural households resort to private healthcare, which costs the poorest 20 per cent more than 15 times their average monthly expenditure.

“In all the farm households I’ve visited, where people have killed themselves, the single largest component of family debt was health costs,” wrote P. Sainath, an award-winning journalist who pioneered reporting on farm suicides in India.

Kerala has the maximum debt

Of all states, agricultural households in Kerala have the highest average loan outstanding – Rs 2.13 lakh. Furthermore, 77.7 per cent of Kerala’s households are indebted.

Interestingly, agricultural households in Kerala also have the third highest average monthly income, (after Punjab and Haryana) and furthermore, 247 per every 1,000 households are engaged in non-farm businesses. That’s significantly higher than the national average of 97.

With its eye on growing rural distress and back-to-back droughts, the 2016 Union Budget focused on agriculture and rural India. The overall budget for the agriculture sector was increased by 44 per cent, from Rs 24,909 crore in 2015-16 to Rs 35,984 crore in 2016-17 (budget estimates). The allocation for the crop insurance scheme Pradhan Mantri Fasal Bima Yojana has been increased by 112 per cent  from Rs 2,589 crore in 2015-16 to Rs 5,500 crore for 2016-17.

Furthermore, Maharashtra has recently expressed its intention to amend the Agriculture Produce Marketing (Regulation), Act which will allow the farmers in Maharashtra to sell their produce to anyone rather than being compelled to sell to only wholesale traders as is the case at present.

In the midst of such gloomy picture, there are a few silver linings. One is the Mandya Organic Farmers Cooperative Society, launched by an IT professional in Karnataka. Mandya witnessed suicides by several sugarcane farmers last year. The cooperative has proved to a lifeline. It enrolls farmers and helps them do organic farming. Over 500 farmers have already registered and collectively, they own close to 200 acres of land and are producing over 70 varieties rice, dals and pulses, edible oils, personal healthcare products, beverages, masalas and spices for sale. In terms of revenue, the company reached Rs one crore in just four months.

We’ll need many more initiatives like Mandya Organic Farmers Cooperative Society in a country where the average farming household can just save Rs 223.

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