Hunger drives India's farmers to edge

By Mark Tully
Special to CNN

INDIA, once so short of food that it had to depend on  American charity,  is now  suffering from a surfeit of food.

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But millions of Indians still go to bed hungry every night and farmers, far from prospering, are committing suicide because the price they get for their produce doesn't cover their production costs.   

In the Southern State of Karnataka I met the families of five farmers who had committed suicide, and in Punjab the government has just announced statutory compensation for the family of any farmer who commits suicide. 

Last year twenty four suicides were reported from just one District in the Punjab. 

Both Punjab and Karnataka are considered among the most prosperous states of India.

So what has gone wrong?    The market has not expanded to absorb the increased production created by the Green revolution.

In the Karnataka villages there was some talk about returning to subsistence agriculture, not spending money on fertilizers and high-yielding seeds, but turning its back on the green revolution which has transformed the country’s agriculture can't be the answer. 

Some  argue that the government should expand the market.

Those millions of Indians who go to bed hungry don't have the purchasing power to buy the food they need so some economists suggest  prices should be more heavily subsidised others would prefer the government to start public works  and use the  grain mountain its sitting on to pay the workers with food.

Farmers fear cheap imports

But the World Bank and the IMF have told India it must cut back on all subsidies. India has also been told it must reduce its fiscal deficit. Increased subsidies would do exactly the opposite.

Now  farmers fear their market will contract further because under the WTO agreement India will not be able to protect its agriculture from cheap imports. 

Restrictions on quantity controls are no longer allowed and no one seems to know the height of the tariff  walls India will be allowed to erect. 

Farmers do know that last year there was a slump in edible oil prices because of the import of cheap palm oil.

Part of the answer does lie within India itself.  All the effort so far has been concentrated on increasing production, dealing with the produce- post harvest management -- has received little or no attention.  

Storage and transport are inadequate and expensive, so waiting for seasonal changes or moving produce from surplus to deficit areas are both beyond the means of most farmers.

In the vegetable market in Bangalore, the capital of Karnataka and the capital  of India’s burgeoning IT industry ,  I saw no evidence of any modern technology to prevent middlemen rigging the prices, and certainly no market information for farmers. 

More than 10 years ago Rajiv Gandhi set up a food processing ministry to expand the agricultural market but its impact has been minimal. 

Rajiv Gandhi’s mother nationalised the banks so that they would provide cheap credit to farmers.

Crippling interest rates

More than 30 years after the nationalisation farmers are still borrowing from moneylenders at the crippling interest rate of five percent per month because the banks are so bureaucratic, and all too often corrupt, too.

Every farmer who  committed suicide in Karnataka was deeply in debt. One had a list of his creditors in his pocket. 

It included a local official who was demanding a bribe to register a land transfer.

Many of the farmers I spoke to said the government should relax controls on exports. But I wonder how much impact that would have. 

India is still a land of small farmers where five acres is considered a reasonable holding and fifty massive.

Can India’s  farmers hope to compete with the economies of scale, and incidentally the hidden or not so well hidden subsidies,  Western farmers enjoy?  I doubt it.

Market economists would argue that Indian farmers will never be able to compete if they are not open to global competition and protect their inefficiency behind tariff walls. 

There is no doubt that Indian agriculture could be more efficient, especially its post-harvest management, but I find it very difficult to understand how there can be one global agricultural order which will allow for the needs of India’s small farmers and at the same time satisfy Western farmers demands for free trade and open markets. 

So  global free trade could well lead to more suicides among Indian farmers without helping those Indian consumers who are below the bread-line.   

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