The problem of farmer suicides has assumed a serious proporition. The toll is increasing year after year. According to the National Crime Record Bureau (NCRB), as many as 5,650 farmers committed suicide in India last year. This works out to one farmer suicide in every 100 villages or one farmer suicide in every block in the country last year. State-wise, Maharashtra accounted for the highest number of farmer suicides (2568) distantly followed by Telangana (898), Madhya Pradesh (825), Chhattisgarh (443) and Karnataka (321). These five states together accounted for about 90 per cent of total farmer suicides.
NCRB pointed out that bankruptcy or indebtedness was the main cause, accounting for 20.6 per cent, closely followed by family issues (20.1 per cent), failure of crops (16.8 per cent), illness (13.2 per cent), whereas drug abuses/alcoholic addiction accounted for 4.9 per cent cases. These five causes together accounted for 75.6 per cent of total farmer suicides. Small and marginal farmers accounted for about 72.4 per cent of total farmer suicides. After a farmer commits suicide, government quite often swings into action and provides hectic financial relief to the family of the deceased. This entails heavy pressure on state exchequer, on one hand and causes irreparable loss to the family and society, on the other.
Rather than spending afterwards on relief package to deal with farmer suicides, it will be better to take preventive measures to control this crisis. The preventive measures should be addressed on both social and economic fronts. In this connection, the importance of financial literacy, education, counselling, and medical services cannot be over-emphasised for addressing social causes. However, economic causes leading to erosion in farm income need to be taken up with a sense of urgency. Farm income is exposed to both production and market risks.
The production risk particularly due to crop failure is being taken care of, at least theoretically, by Agricultural Insurance Company with crop damage estimates at block or sub-block levels. Needless to say, estimates at the individual farm level are imperative to help the affected farmers. The efficiency of this can be enhanced by use of remote sensing techniques rather than crop cutting experiments. This will also curtail lengthy procedural delays and reduce the human bias to a great extent to ensure timely assistance to the farmers. Unfortunately, there is still no mechanism to address market risk. Thus, there is an urgent need to speed up agricultural marketing reforms to ensure fair deal to farmers.
As pointed out earlier the main cause of farmer suicides was indebtedness. Hence, we need to keep a close watch on level and trends of indebtedness of farmers. According to latest All India Debt and Investment Survey 2013 (70th Round of NSSO) incidence of indebtedness among the cultivators was as high as 46 per cent with asset-debt ratio of 2.5. The incidence of indebtedness was alarming at 74 per cent in Telangana, Maharashtra (56 per cent) and Karnataka (55 per cent). Majority of farmers are neck-deep in debt. Once asset-debt balance is disturbed, mainly due to crop failure, farmers feel helpless and look for relief. In this backdrop, there is need for close watch at individual farmer level by evolving Early Warning Signal for Farmers (EWSF) as is prevailing for corporate borrowers.
The EWSF can be constructed by various techniques. One such technique could be to request the commercial banks in India to regularly prepare a village-wise list of farmers who have availed large amount of loans in relation to their assets and earnings, on half-yearly basis. The list prepared by the commercial banks should then be updated with data from regional rural banks, cooperative banks and micro-finance units. Presumably, after exhausting the credit from institutionalised sources like cooperative banks, regional rural banks, and commercial banks, farmers tend to augment resources from the money lender. This village level list can be used to identify farmers who have large exposure to credit and are potential suicides of future.
The block, district and state level banking committees should discuss such a list and finalise the list of vulnerable farmers under their jurisdiction. The ‘red alert’ that the list creates should be shared with local administrative officials at block and village level, as well as the regional offices of the Reserve Bank of India and National Bank for Agriculture and Rural Development (NABARD).
As farmer suicides are a matter of grave concern for a fast developing country and a challenge to the well-planned existing financial infrastructure, there has to be some responsibility assigned to the officials of the concerned area where the suicides occur. Therefore, local revenue officials at the village and block level should be entrusted with the responsibility of making enquiry about the financial health of identified farmers based on EWSF and including private loans of the farmer’s family.
Such village and block level revenue officials should not only be responsible for counselling of such distressed farmers but should also help in initiating bankruptcy proceedings or restructuring of loans in case the farmer is found in a debt trap. The local administrative officials should be made accountable for farmer suicides in his area of operations. Once such a EWSF list is available, then NABARD and RBI can play a more important role. NABARD has presence in every district and can help to ensure that insurance claims are settled on time by synchronising with harvest to save the farmers from debt traps.
NABARD and the RBI could help in restructuring of loans particularly issued by commercial banks, cooperatives, regional rural banks and microfinance institutions. RBI and NABARD need to play a pro-active role through block and state level banking committees. There is also a need to keep watch, with state support, on the activities of the money lenders and others engaged in similar activities in rural areas. In short, preventive measures are a far better option as compared to soothing measures after the suicide by the farmer.