THE agrarian crisis in five words: The drive towards corporate farming.

But for the everyday act of cultivation, there is almost no sector of agriculture that corporations do not dominate. Seeds, fertilizer, pesticides, other inputs. Prices, trade, all the way to Big Retail. Even water is being privatized to their benefit. And though they do not as yet in India own vast tracts of land, they hardly need to. The nature of their control over everything else, added on to the kinds of contract farming they’re pushing, allows them to dictate which crop many farmers shall grow. Allows them to switch that crop at will. To renege on contracts when it suits them, too. The chances of small farmers gaining legal redress in contract disputes with corporates equal the survival hopes of the last ice cream at a kiddies party. All this is apart from the vice-like grip of a handful of giant corporations over the global trade in agricultural commodities.

The process by which this is achieved (five words): Predatory commercialization of the countryside (in the words of K. Nagaraj of the Madras Institute of Development Studies – MIDS).

The last 15-18 years of policy measures sculpted the situation that now exists. Investment in agriculture has collapsed. Credit has dried up even as farm incomes have crashed. Sector after sector – for instance, seed – has been opened up to predatory corporate control. Mindless deregulation has been the norm, embracing the World Bank and IMF prescriptions with enthusiasm and bringing Indian agriculture to the WTO heel. Millions of small farmers who cannot take the risks have been shifted from foodcrop to cash crops and locked into global price volatility. Extension services were crippled and most agricultural research now serves corporations, not communities. Input costs have skyrocketed, for some crops (like cotton, for instance) by several hundred per cent over those 15-18 years. Standards (like minimum germination rate of seed) were lowered or done away with.

And the explosion of costs is on all fronts, not just in agriculture. Large numbers of indebted farmers who committed suicide had huge health expenditures. Several had mortgaged land to pay their hospital bills. Many others still do that and also see their children dropping out of an education they can no longer afford. In short, the hyper-commercialization of the countryside.

One major and ongoing outcome (five words): The biggest displacement in history.

 

Some eight million farmers have quit cultivation. There were 111 million cultivators recorded in the 1991 Census, 103 million in the 2001 Census. Where have they gone? We don’t really know since no systematic work has been done on the scale required. In the media, we aren’t really interested. We can tell you where Paris Hilton is, though. When the 2011 Census appears it is likely that even the eight million figure will be dwarfed as the enforced ‘exit policy’ in farming proceeds unchecked. Where will they go? How will they be absorbed? And apart from these troubling questions: at least 1,82,936 farmers have ended their own lives, in the largest sustained wave of suicides ever recorded, anywhere (see annexure). We are staring at, but not seeing, the most unbelievably intense misery in the countryside. And one sustained over a period of many years.

The agrarian crisis is comprehensive, all-encompassing, reaching almost every crop, touching almost every sector. It has been around for quite a while, too. And the corporate conquest of agriculture is well apace.

 

Some ground rules that help understanding:

Do not disconnect urban from rural India. This is a big mistake, often made. The same processes are at work in both, the same policies – even if the fallout is more dramatic in the farm sector. Also, the two are closely connected at many levels. Take the diversion of credit, for instance, towards fuelling urban (and rural elite) upper middle class consumption. Through 2003-04 several farmers killed themselves, unable to raise crop loans of Rs 8,000 or less, except at exorbitant rates of interest. This was at a time when banks were offering upper middle class professionals a chance to buy a Mercedes Benz at 4-6 per cent interest – without collateral. In any case, at the political level, the decisions are made in urban India.

Do not disconnect the rural from the rest of the world. The most dramatic effects of neoliberal globalization are, in fact, seen in the countryside. The operations of Wall Street’s Index Funds can have huge impact on the livelihoods of rural Indians. Speculation in markets around the world have a major fallout, likewise.

The rise of inequality in post-1991 India has been nothing short of stunning. India today has 51 dollar billionaires, but ranks 128 in the UN Human Development Index. While 51 individuals in a population of over one billion have a net worth equalling roughly 31 per cent of our GDP, the Report of the National Commission for Employment in the Unorganised Sector tells us that 836 million other Indians get by on less than Rs 20 a day. Such contrasts are endless. The inequality of the past 18 years is different from that of the preceding 40 years in this respect. Never has it been so cynically constructed, so ruthlessly engineered.

The same process has been on at the global level. Even the meltdown – which has just begun – is strongly linked to that process. CEO salaries exploded, and wealth concentrated at unprecedented levels in a tiny number of hands, while the real wages of working people stagnated or shrunk all the time. In 2008, a year of millions of layoffs, the heads of New York’s financial firms paid themselves bonuses of $ 18 billion. Wages fell and jobs were lost in millions in an era where two-thirds of US corporations paid zero corporate income tax between 1998 and 2005. Anyone could see that it could not be sustained. You’d have to be an economist to believe it could.

 

This was one of many inequality building processes on at the same time around much of the world. It would be entirely wrong to read agriculture apart from this and other such processes. This was always a disadvantaged sector in that average wages here are lower than in others. When we deepened our inequality by design, agriculture was bound to take the worst hit.

Follow the money. At all times, follow the money: There’s big bucks in misery. And agriculture is going to be the great provider of both, big bucks and misery. Remember the food price crisis last year when the West touted the idea that it was because Indians and Chinese were eating a hell of a lot more? How were the large corporations in that sphere doing? As the Wall Street Journal noted (30 April 2008): ‘At a time when much of the world is facing food riots, Big Agriculture is dealing with a different sort of challenge: huge profits. The grain processing giant Archer Daniels-Midland, for instance, saw a 42 per cent rise in its fiscal third quarter profits. "Including a seven-fold increase in net income in its unit that stores, transports and trades grains such as wheat and corn, as well as soybeans." Seed and herbicide giant Monsanto and fertilizer-maker Mosaic "all reported similar windfall profits in their latest quarters".’

Giant companies were and are buying up farmland, fertilizer, shipping equipment and a lot else. What we’re looking at is the largest vertical and horizontal integration of a sector attempted in our time – and that is food and agriculture. Across the globe, the entire chain of resources and inputs is being cornered by corporations. Ultimately, the world can live without power and SUVs if it has to. It cannot live without food and water. Grab those and you have the world by its belly. But for the Journal, the problem arose with ‘China and India gobbling food as never before and food prices soaring…’

Incidentally, those food prices at the global level fell sharply a while ago. Did it imply the same Indians and Chinese began starving? As a matter of fact, the daily net per capita availability of food grain in India sank from 510 grams in 1991 to 422 in 2005. What had happened was the same with oil, as with food. Speculative capital was moving towards agricultural commodities and fertilizer, driving prices upwards.

 

As India entered the brave new world of neoliberalism, that of the largest body of small holder farmers in the planet fell apart. Every policy measure went against them. Investment fell, in one estimate, by Rs 30,000 crore each year in rural India. The few protections small farmers had vanished. And whole new classes of predators appeared in the countryside.

As thousands of bank branches shut down in rural India and credit dried up, farmers turned more to moneylenders. But this time of a different kind. The small village sahukar is hardly a force in regions like Vidharbha. Indeed, some small moneylenders have committed suicide – their clients have all defaulted or vanished (or killed themselves). In the decade from 1991-92, Indian farm households in debt went up from 26 per cent to 48.6 per cent. The regions seeing high numbers of suicides are also regions where peasant indebtedness is very high. Over 80 per cent of Andhra’s farm households, for instance, are in debt.

 

Novel forms of credit dominate. For instance kandhe palat (switching the shoulder) is fairly common. Borrowing from the private lender to pay off the bank and vice versa, and adjusting one loan with a new one until the whole game collapses under impossible rates of interest. Then there are diverse forms of chit funds and ‘finance companies’. Clearly, though, the most important person in this scene is now the input dealer. The man who sells the farmer seed, pesticides and other inputs is uniquely situated to exploit the mess. He is at once creditor, tradesman, salesman. Being the creditor, he can not only fleece the farmer on price, he can also push him to use those inputs which will bring him the maximum profit. (For instance, Bt cotton or vanilla). With the extension system extinct, he is also the technologist and agro-scientist advising the farmer on what to use. And farmers indebted to him often end up having to sell him their produce at very low rates.

The era of high cost, high input, high chemical use agriculture ought to have ended years ago – but is firmly entrenched. In that too, the input dealer is vital. Last year, Vidharbha’s farmers disillusioned with cotton, shifted to soybean in large numbers. Some input dealers responded by holding back on fertilizer – leading to serious disturbances. The dealers did that because they needed to sell the farmer Bt cotton seed, not soybean. That’s where their profits came from.

 

It cost Rs 2500 for a typical (non-organic) farmer to cultivate one acre of cotton in Vidharbha in 1991. Today it can cost upwards of Rs 13,000. Seed (then local) could be had for nine rupees a kilogram – if you didn’t produce it yourself. By 2005, a 450 gram bag of (Monsanto’s) Bt. cotton seed was selling for between Rs 1650-1800. But in 2006, cotton was fetching the farmer the same per quintal as it did in 1994 though input costs had quadrupled. In Wyanad, Kerala, a farmer raising an acre of paddy could have done it for Rs 8,000. Many, lured by marketing, urged by government, shifted to vanilla – which in 2003 cost Rs 1.45 lakh an acre to grow. The risks multiplied, the costs multiplied – income did not. Even with the vanilla growers, the initial season was brilliant. A kilogram of vanilla fetched the farmer Rs 4000 plus – almost 100 dollars. Last year, that was selling at Rs 68 a kilogram with few takers.

We had locked our farmers into the volatility of global cash crop prices, rigged and controlled by a handful of corporations. Add to this the obscene subsidies that the US and EU threw at their corporations and growers. In the US, subsidies made up two per cent of total farm income in 1974. By year 2000, they made up 47 per cent of total farm income. In item after item, US-EU subsidies destroyed millions of livelihoods, not just in India but across the world.

On 11 July 2003, the presidents of Mali and Burkina Faso wrote a piece in The New York Times saying ‘Your subsidies are strangling us.’ In 2000-01, some 25,000 US cotton producers had got $3 billion in subsidies. That was more than the entire economic output of Burkina Faso, a country dependent on cotton for its meal ticket. These nations and Chad and Benin also saw cotton farmers committing suicide. The crisis is worldwide and affects small holders almost everywhere. In the US, less than 700,000 family farms remain and they’re going bankrupt at the rate of 170 a week. There are three times more people in prison in the United States (2.3 million) than there are family farms. The corporate hijack of agriculture is far more advanced there.

 

In India, we made no effort to raise duties to halt the dumping of highly subsidised US cotton on this country. Sharad Pawar was not in the least interested. Cotton was not his baby. The subsidized US cotton was grabbed by our textile magnates. They were getting it virtually free. No prizes for guessing what this did to the cotton price for Vidharbha farmers. Maharashtra’s suicides are perhaps unique. In that state, farmers have written suicide notes addressed to the prime minister and chief minister on the issue (while many experts ponder about why these people are taking their lives).

India’s farmers were and are buffeted on all sides these past 15 years. In different states of the country you will find many who tell you the only way a farm can survive is to have one son or brother working in the city who sends some money back to the farm. More and more people quit farming in the past decade and migrations went berserk, but that’s another story.

The end is not in sight. Not after the prime minister’s 2006 visit. Not after the 2008 loan waiver. Yes, the waiver did bring a measure of relief to some. And yes, the Congress might benefit from it in some pockets. But it was and is no solution. In fact, credit for the fresh season is proving to be a huge problem for millions of farmers. Very few of the major recommendations of the National Farmers Commission have found expression in policy. The CAG’s reports on the ‘relief packages’ have been devastating.

The crisis still lives. And thrives. It will not be resolved by band-aid relief packages. Tackling it calls for nothing short of a huge reversal and transformation of policy. And along with that, an addressing of the long-term real reforms that Indian agriculture needs. Including what kind of agriculture we need to replace this dying model with.

 

Annexure – Farm suicides: numbers and background.

At least 1,82,936 farmers took their own lives between 1997 and 2007. That is the largest sustained wave of suicides ever recorded anywhere. There were at least 16,632 such deaths in 2007, the last year for which data are available. In the period 2002-07, farm suicides occurred at almost the rate of one every 30 minutes, on average. Suicide data are collated by the National Crime Records Bureau (NCRB), a wing of the Ministry of Home Affairs, Government of India.

It’s best to prefix the numbers with ‘at least’ since the states logging their data with the NCRB exclude thousands from the definition of ‘farmer’. For instance, women do much of the agricultural work there is, but land is seldom held in their names. So a woman farmer’s taking her life is counted as a suicide, but not as a farmer’s suicide. Thus, 82 per cent of all farm suicide victims, on paper at least, are male. ( Haryana records zero women farmer suicides in more than one year.)

 

In Andhra, between 1998-2001, a large number of the suicides – mostly committed by consuming pesticide – were recorded officially as ‘suicide due to unbearable stomach ache.’ In Maharashtra, for three years now, the government has sought to lower the tally by ‘rejecting’ as ‘non-genuine’ literally hundreds of suicides by farmers. The object of this exercise is to combat the adverse publicity since the prime minister’s Vidharbha visit. And also to lower the number of suicides ‘eligible for compensation.’ The list of such fiddles is large. Yet, after all the massaging, the number still arrives at its grisly total.

Close to two-thirds of these suicides have occurred, as the analysis of NCRB data by K. Nagaraj of the MIDS shows, in five states. Maharashtra, Andhra Pradesh, Karnataka, Chattisgarh and Madhya Pradesh. The Big Five account for just about a third of the country’s population, but almost two-thirds of its farm suicides. The rate at which farmers are killing themselves in states like Maharashtra and Andhra is far higher than suicide rates amongst non-farmers. In Maharashtra, for instance, across a decade, farm suicides increased by 105 per cent – while the number of suicides by non-farmers actually declined by two per cent. Suicides amongst the state’s population as a whole rose by 14 per cent in the same period.

How do the NDA and UPA years compare? If we treat 2004 as a shared year and look at three more years of each formation, there is almost no difference. At least 59,943 farmers killed themselves in the UPA years of mid-2004 to end-2007. For the NDA, from the start of 2001 to mid-2004, that figure is 60,670. (By 2001, Indian agriculture was well and truly down the WTO garden path.) The six years from 2002-07 saw a significantly higher number of suicides – 17,367 on yearly average. For the five years from 1997-2001 that yearly average was 15,747. Even allowing for a dip in a year or two, the trend is ominous. It is upward and unrelenting.

 

The recording nationwide of farm data on suicides began in 1995. But significant states did not start reporting their data till 1997. Which is why that is used as the base year. However, Maharashtra has been logging its data since 1995, which show that the state has seen at least 40,666 farm suicides between that year and 2007. Maharashtra, particularly Mumbai, is also home to 23 of India’s 51 dollar billionaires who grace the Forbes headcount of that species. Maharashtra is the only state to have crossed 4,000 farmers’ suicides in a year, a feat it has achieved thrice: in 2004, 2006 and 2007. This despite a prime ministerial visit to the worst-hit Vidharbha region. And despite the relief packages worth over Rs 5,000 crore (US$ 1 billion) that followed. No other individual state has ever crossed the 3,000-mark.

The agrarian crisis is not just about farm suicides and should not be measured by them. The suicides are an outcome of the agrarian crisis, not its origin. A consequence of the crisis, not its cause. You can have villages that have seen no significant numbers of farm suicides, perhaps none at all – which are yet deep in crisis. Yet, the suicides are a giant human tragedy in themselves and their sheer scale also makes them vital to look at and understand. They also mirror telling aspects of the crisis.

Debt was clearly the main driver. And indebtedness amongst the Indian peasantry doubled in a decade from 1991-92. The number of farm households in debt went up from 26 per cent to 48.6 per cent in that period. The regions seeing high numbers of suicides are also regions where peasant indebtedness is very high. Over 80 per cent of Andhra’s farm households, for instance, are in debt.

There are other features common to these regions, as K. Nagaraj points out: ‘These are zones of highly diversified commercial agriculture. Cash crops dominate and, to a lesser extent, coarse cereals. Water stress has been a common feature. And problems with land and water have worsened as state investment in agriculture disappears. Some inputs have seen cost hikes of several hundred per cent.’ Stunning crashes in prices, massive US-EU subsidies to their growers, huge price volatility and price rigging by large corporations with a vice-like grip on the trade in agricultural commodities – these too played a role.

 

As banks withdrew from rural areas and agricultural credit, things worsened. On the one hand, farm incomes collapsed. (The NSS pegged the average monthly per capita expenditure of the average Indian farm household at Rs 503. Of this 58 per cent went on food. Another 18 per cent on fuel, footwear and clothing.) On the other, as formal credit dried up, indebtedness rose. As K. Nagaraj puts it: ‘Even as subsidies for corporate farmers in the West rose, we cut our few, very minimal life supports to our farmers. The collapse of investment in agriculture also meant it was and is most difficult to get out of this trap.’