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Farmers’ Distress In India

Farmers’ Distress In India. Srijit Mishra srijit@igidr.ac.in Lecture to YSP participants, IGIDR 23 June 2009. Presentation Format. Suicide Mortality Rate Risk Factors Matrix of Issues Twin Dimensions of Crisis in Agriculture Risk Mitigation Concluding Remarks. Suicide Mortality Rates.

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Farmers’ Distress In India

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  1. Farmers’ Distress In India Srijit Mishra srijit@igidr.ac.in Lecture to YSP participants, IGIDR 23 June 2009

  2. Presentation Format • Suicide Mortality Rate • Risk Factors • Matrix of Issues • Twin Dimensions of Crisis in Agriculture • Risk Mitigation • Concluding Remarks

  3. Suicide Mortality Rates

  4. NEUROBIOLOGICAL (Predisposing) SOCIO-ECONOMIC (Precipitating) The Risk Factors The larger study on farmers' suicides focuses on examining socio-economic aspects that can be identified as important risk factors and in providing some policysuggestions.

  5. Matrix of Issues

  6. Agrarian Crisis Threatening Livelihood of Farmers (particularly, the small and marginal) Farmer, people Agricultural (Developmental) Crisis Lies in the neglect of agriculture (designing of development programmes and allocation of resources) Farming, goods Two Dimensions of Crisis in Agriculture

  7. Features of the Current Crisis • Deceleration in production and productivity. • Waning profitability and poor returns. • High dependence on agriculture (64% rural persons in 2004-05) – limited non-farm opportunities. • Low size-class of holdings (63% marginal, 2000-01). • Decline of public investment in irrigation and other infrastructure. • Inadequate supply of credit from formal sources. • Failure of research and extension (rainfed/dryland). • Changing technology and market conditions has increased uncertainties in product & factor markets.

  8. Deceleration in Production and Yield

  9. Sectoral Share and Employment Status of Rural Workforce

  10. Share of Agriculture in GDP and Employment

  11. Monthly Per Capita Income/Consumption by Size-Class of Holdings, 2003

  12. Per capita per day returns, 2003 (Rs)

  13. Farm Business Real Income Deflated by CPIAL (1993-94=100)

  14. Number of Poor and undernourished farmers in million

  15. Per worker productivity in Agriculture across states

  16. Operational Holding and Area (%)

  17. Irrigation Growth Rate

  18. Captital Formation in Agriculture

  19. Share of credit disbursed to share of area

  20. Important Measures of Trade Liberalization

  21. Evaluating Risk Mitigation through the prism of Choice of Techniques Ti: Xi →Yi; i=0,1. T1>T0 if X1<X0 or Y1>Y0 (improvement if input-saving or output-enhancing Now, if Y1>Y0 and X1>X0 (output-enhancing and uses more resources; further there could be a change in composition of X) and (Y1-X1)>(Y0-X0) (net returns are higher) But, (Y1/Y0)<(X1/X0) (increase in output is lower than input – risk mitigation is more difficult)

  22. Risk Mitigation: Alternative Scenario

  23. Evaluating Risk Mitigation: An example

  24. The Lesson • Interventions that are thought to address a part of the risk will also have a cost dimension and it is in this that instead of reducing ends up adding to the risk. • With poor returns, the call of the hour is to bring about an intervention or a mix of products where costs should reduce and returns should increase.

  25. Concluding Remarks • Debt waiver ... • Challenge for technological and financial gurus is to innovate products that reduce costs while increasing returns. • Address larger crisis of low returns and declining profitability (not piecemeal). • Risk management should address yield, price, credit, income, weather and other uncertainties. • Water availability with diversification in farm and also increasing non-farm opportunities. • Improve research and extension, regulate private providers of input and credit. • Organizing farmers through a federation of Self Help Groups would help address an institutional vacuum.

  26. Selected Readings • Bhaduri, Amit (2008a), Predatory Growth, Economic and Political Weekly, 43 (16), 10-14. • Bhaduri, Amit (2008b), Inaugural Comments, National Seminar on Health Equity in India, Sarvodaya, St Pius College Campus, Mumbai (Organizd by SATHI, Pune), October 2-3, 2008. • Government of India (2007), Report of the Expert Group on Agricultural Indebtedness, Ministry of Finance, New Delhi, (Chairman: R Radhakrishna). • Mishra, Srijit (2006), Suicide of Farmers in Maharashtra, Indira Gandhi Institute of Development Research (IGIDR), Mumbai. • Mishra, Srijit (2007), Agrarian Scenario in Post-reform India: A Story of Distress, Despair and Death, Orissa Economic Journal, 39, (1 & 2), 53-84. IGIDR Working paper version is WP-2007-001. • Mishra, Srijit (2008) Risks, Farmers’ Suicides and Agrarian Crisis in India: Is There a Way Out? Indian Journal of Agricultural Economics, 63 (1), 38-54. IGIDR Working paper version is WP-2007-014. • Reddy, D. Narasimha and Srijit Mishra (eds.) (2009), Agrarian Crisis in India, Oxford University Press, New Delhi. • Reserve Bank of India (2006), Report of the Working Group to Suggest Measures to Assist Distressed Farmers, Rural Planning and Credit Department, Mumbai, (Chairman: S. S. Johl).

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