Reeling under debt

Print edition : August 05, 2016

Ripe silkworms being picked from their mulberry leaf beds at Arechakanahalli in Maddur taluk in Karnataka. Photo: Vikhar Ahmad Sayeed

ON October 6, 2015, Mariyappa, a 46-year-old sericulturist of Channegowdanadoddi near Maddur town in Mandya district, committed suicide by consuming poison after silk cocoon prices went into free fall. It was the third time in 15 years that cocoon prices had crashed. His son, 21-year-old Prasan Kumar, said that between the second crash in prices in 2010-11 (when Mariyappa borrowed money for the first time) and the third crash in 2014-15, his father’s debt had increased to Rs.7 lakh. With his unsecured loans coming from private moneylenders, Mariyappa got trapped in a dangerous cycle of borrowing at high rates of interest (usually at a monthly rate of 3 per cent).

The majority of the 400-odd families of Channegowdanadoddi, a village located off the Bengaluru-Mysuru highway, belong to the Vokkaliga caste and practise sericulture farming. Of the approximately 1.5 lakh mulberry silk farmers in Karnataka, more than 10,000 are in Maddur taluk. All the three cocoon price crashes were linked to the lowering of customs duty on imported raw silk. When there is a reduction in import duty, the demand for raw silk from China, which produces more than 80 per cent of the world’s silk, increases in India. This leads to decreased demand for locally produced raw silk, leading to a fall in the prices of silk cocoons. The sericulturist, who grows mulberry plants and rears silkworms that feed on mulberry leaves and form cocoons, is the most vulnerable link in this chain. Indian sericulturists need tariff protection because they produce on a small scale compared with the silk farmers of China, whose cost of production is far lower than that of the Indian producers.

Import duty on raw silk reduced

In 2011, for instance, the import duty on raw silk was reduced from 30 per cent to 5 per cent in that year’s Union Budget. The price of one kilogram of silk cocoons fell from Rs.380 to Rs.150 in a single day when news reached the Government Cocoon Markets in Karnataka where silk cocoons are auctioned to silk reelers. Responding to the news, a farmer couple of Mandya district committed suicide. In 2015, the price of cross-bred silk cocoons fell from Rs.267 a kg to Rs.148 a kg, forcing at least 10 sericulturists to end their lives in southern Karnataka. This drop in price was linked to a reduction made by Finance Minister Arun Jaitely in the import duty on silk from 15 per cent to 10 per cent.

N. Puttaswamy, 32, a sericulturist of Arechakanahalli, said the input cost of producing one batch of silk cocoons (cross-breed) of around 150 kg was approximately Rs.30,000. This includes the costs on silkworm larvae, chemical disinfectants, transport and labour and does not include recurring agricultural costs on growing mulberry plants, which are also significant. This estimate does not include the capital costs of setting up a silkworm-rearing warehouse and the cost of land if it is leased. Currently, 1 kg of silk cocoons is sold at around Rs.250 at the Government Cocoon Market in Ramanagara. Puttaswamy says this is inadequate as often the farmers do not even recover their input costs. A sericulturist who has an acre of land produces five to six batches of silk cocoons in a year.

“In the post-liberalisation era, income from the sale of silk cocoons has not kept pace with the increasing cost of cultivation and the cost of living. Every crash has had a serious impact on the silk farming community,” said T. Yashavantha, a farmer belonging to Thoreshettahally village in Maddur taluk. Yashavantha is an activist of the Karnataka Prantha Raitha Sangha, a State-wide peasants’ organisation affiliated to the All India Kisan Sabha.

In 2011, Frontline investigated the crisis among sericulture farmers following import duty reduction. Compared with the situation then, input costs have increased significantly now, while the sale price of cocoons has not gone up. Thus, the linkage with the global silk market has not helped farmers. While the ease of importing silk in the post-liberalisation era and the reduction in customs duties have benefited silk traders, merchants and large producers, government-controlled silk cocoon trading markets (like the one in Ramanagara) have not protected the interests of small sericulturists. While the government markets have responded to the vagaries of the global silk market, they have failed to soften the impact of price fluctuations on small farmers.

Prasan Kumar is not interested in continuing sericulture farming; his land remains fallow. He has become a newspaper vendor and is contemplating migrating to Bengaluru, which is only a couple of hours away, to work as an unskilled labourer.

Vikhar Ahmed Sayeed

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