THE DEATH TRAP

Faced with mounting debt, a failed crop for the second year and government indifference, cotton farmers in the Vidarbha region of Maharashtra are resorting to suicide as a way out of misery.

BALKRISHNA AJABRAO SAWAI, a farmer of Jagona village in Hinghanghat district in the Vidarbha region of Maharashtra, cultivated cotton on his eight acres (3.2 hectares) of land, and the returns were good until a couple of years ago. On October 30, he was found dead in his field. A visceral examination indicated the presence of a pesticide. He had apparently taken the step unable to face the local bankers and moneylenders who had loaned him money. Two successive failed monsoons, coupled with the non-payment of dues by an apathetic State government, left him with barely enough to feed his family and repay a debt of Rs.50,000. It is a situation that thousands of farmers in the cotton belt of Maharashtra are familiar with, and increasingly they are reaching for the pesticide can as a way out of the misery.

More than 80 suicides have been reported since May 2001 in 12 districts, primarily in the Vidarbha region of eastern Maharashtra. A large number of deaths have been reported this year than last year after a second crop failure and dipping cotton prices left farmers with no chance to repay their loans. Even a hand-to-mouth existence was rendered difficult by the State government's irregular payments for the cotton it procured last year. In six weeks from early October to mid-November this year, nine suicides were reported in two districts, five of them from Ralegaon, a core cotton-growing area. In almost every case the reason for the suicide was the same - mounting debt owing to a crisis in the crop - as Frontline found out in several villages that it visited in Wardha and Yavatmal districts.

Although the suicide cases have been registered at police stations, the State government refuses to put out a figure or acknowledge the reasons for them. State Agriculture Minister Rohidas Patil told Frontline that the administration had investigated the deaths and concluded that most of the deaths were from natural causes and not because of any crisis in agriculture. While Patil at least admits to the deaths, the District Collectors of Amravati, Yavatmal, Buldhana and Washim where most number of suicides have been reported either deny the deaths or attribute them to the run-up of bills for marriages or medical problems. To link these household financial burdens to an irregular and low income coming from crop sale "is completely inaccurate," says Parag Jain, the Collector of Yavatmal district. "We have conducted a detailed inquiry and found that their personal and psychological problems led them to this state. It is, therefore, not our concern."

Such official unconcern flew in the face of the list of suicides compiled by the Maharashtra Cotton Growers Farmers Sanghatana. Frontline visited the families of eight persons on the list, in eight different villages, and was able to confirm the deaths. Not a single official had visited any of the families even in Yavatmal. In one case, a Tehsildar had demanded Rs.15,000 from the family if it wanted the case to be registered as suicide. In many cases the Collectors were dismissive of the deaths. "Suicides are quite common in these parts," said Wardha Assistant Collector A.E. Bansod.

In 1997, the Vidarbha region faced a similar crisis when approximately 80 suicide cases were registered officially. Untimely rain destroyed the kharif crop that year, leaving small farmers with little money and less hope to clear their debts. While the suicides both times may have been triggered by the vagaries of the weather, it is becoming increasingly clear that the root of the problem lies in the economic and other policies adopted by the government.

"Such a crisis of mounting indebtedness and despair is unprecedented in independent India and it is the direct result of trade liberalisation, exposure to global volatility and resulting price crashes," says economist Utsa Patnaik. "The cynicism of the aggressively pro-reform government in the State is revealed by its decision to stop making ex-gratia payments to the relatives of farmers who committed suicide, on the grounds that it `encouraged' suicide."

Utsa Patnaik, in a paper titled "Deflation and Deja Vu: Indian Agriculture in the World Economy", says the majority of cotton growers are small farmers. They are highly price-responsive and have been so since colonial times. She says that as world cotton prices improved in the early 1990s and unregulated exports were permitted, hundreds of thousands of farmers expanded the area under cotton. They took large cash advances from traders and loans from banks to meet the extra seed and input costs on vast tracts of rain-fed land.

One and a half million hectares of land was diverted from foodgrains to cotton between 1991 and 1996, according to Utsa Patnaik. "Unfortunately, the cotton crop is susceptible to a large variety of pests and the unholy trinity of commission agents, fly-by-night pesticide dealers and seed suppliers," she says. Cotton prices started declining in 1995-96 from 75 cents a pound to an all-time low of 35 cents in October 2001. This, along with the lack of rain, spelt doom for the farmers. Worse still was the condition of the farmers who had bought the expensive Bt cotton seed from multinational companies such as Monsanto. It did not germinate this year because of insufficient rain.

Adding to the farmers' problems is the increase in cotton imports, particularly from the United States. With the government lifting quantitative restrictions under the World Trade Organisation (WTO) treaties, cotton imports from the U.S. increased from 21,221 tonnes in 1999 to 48,805 tonnes in 2000. "By permitting imports of cotton at 5 per cent duty, the Central government has destroyed the domestic market. Prices have fallen drastically and the only people who have gained are those in the textile industry," says Vijay Jawandhia, leader of the Kisan Sanghatana based in Wardha. "The powerful textile lobby is resisting any move to increase the import duty on cotton... Thirty lakh farmers have been squeezed to allow the textile industry to run profitably." In its defence, the Indian textile industry claims that the cheaper imported cotton is better suited to the export requirements of Indian textile mills.

There is a glut of cotton in the world market at present. With more than one million tonnes of stock remaining from last year, cotton prices during the current marketing season are at their lowest since 1973, says the Washington-based International Cotton Advisory Committee (ICAC), an association comprising 42 countries growing and consuming cotton. "These prices, along with a failed monsoon, have been crippling the Indian small farmer," says the ICAC, which assists members in framing policy and providing technical advice.

Jawandhia says the government is so dead set on free trade, but no such thing exists. International commodity prices have fallen, he says, because countries like the U.S. provide their farmers with huge subsidies as well as impose exorbitant import duties. For instance, subsidies account for 30 per cent of producer prices in the U.S. Japan levies a 1,000 per cent duty on rice imports. The WTO agreement allows India to set import duties ranging from 100 to 300 per cent on agricultural goods. But the government is adamant on sticking to single digits, pandering to the rich countries, says Jawandhia.

In Maharashtra, the State government seems to pander to the sugar lobby, says Ashok Dhawale, a leader of the All India Kisan Sabha. "Why is it that the import duty on sugar is almost 60 per cent? And when the price of sugar fell, the government immediately announced subsidies for exports." It is well-known that Maharashtra's sugar lobby comprises some of the State's most powerful politicians. While cotton is almost entirely a dryland crop, sugarcane fields drink the lion's share of irrigation water in Maharashtra. The Kisan Sabha is demanding a 150 per cent import duty on cotton. This could save lakhs of farmers from their present plight.

MORE than 30 lakh farmers are dependent on cotton cultivation in Maharashtra. Vidarbha accounts for 20 per cent of the cotton production in the country, which places Maharashtra second in cotton production in India. Approximately 30 lakh hectares, which is about 16.9 per cent of Maharashtra's net sown area, is under cotton. The region's growth took off when Britain sourced its cotton from here for its textile industry during pre-Independence days. It was Amravati cotton that was primarily exported. During the textile boom, Mumbai's mills used a large portion of the crop output. The proximity to Mumbai also helped exports.

Yet, for all its contribution, the State has paid little attention to the needs of this farming community. Irrigation, for instance, is virtually non-existent. Most of the area is under dryland farming. The region is almost entirely rain-fed. Insufficient rain brought down the harvest to 42 lakh bales this year from 52 lakh bales last year.

The State government's neglect of cotton farmers has played a large role in their falling fortunes. For the past three decades Maharashtra's cotton farmers have been protected by the State's unique Monopoly Cotton Procurement Scheme (MCPS). It is the only assurance of a fair price for this cash crop, but there was talk that it may be scrapped. If that happens, the farmers will have to compete in the open market. They will have no guaranteed income and will be at the mercy of private traders.

Citing financial difficulties, the Democratic Front government in the State announced that this year it will buy cotton at the Central government's minimum support price (MSP). Initially, Chief Minister Vilasrao Deshmukh stated that the State could not afford to pay the MCPS bonus in advance. But on the first day of the winter session of the Assembly in Nagpur, December 12, he relented to political pressure and announced that the government would pay the bonus in advance in two instalments. The price per quintal was fixed at Rs.2,300. The bonus is what makes the scheme so popular (see box).

Over the last decade, the scheme has become heavily politicised. Successive governments tried to scrap it, yet it has survived. Ironically, when the MCPS was introduced, the free-market proponent, the BJP, labelled it protectionist and demanded its withdrawal. Now, with the media exposing the increasing number of suicide cases, Opposition politicians and also partners of the ruling coalition have sprung into action to exploit the situation. The Shiv Sena and the BJP have activated a campaign against scrapping the MCPS, which, they say, is the only way to protect cotton farmers.

Meanwhile, several Ministers from Vidarbha, who belong to the Nationalist Congress Party, the largest ally of the Congress(I) in the Democratic Front, threatened to resign from the party if the MSP was not increased and the promised bonus was not paid. Vilasrao Deshmukh, however, would not budge. He dismissed their threats as "drama" and said that if the Ministers were serious they would have tendered their resignations to the Speaker of the Assembly.

These political shenanigans and vote-bank politics were seen last December too. The Shetkari Sangatana, along with the BJP, had staged a rail-roko agitation demanding that the farmers be paid the full support price and the balance of the State-guaranteed price later. The government relented and offered to pay 90 per cent of the support price. The last payment of this was made to the farmers in early November.

The MCPS is a sort of benchmark price, says S.S. Sandhu, Chairman of the Maharashtra State Cooperative Cotton Growers Marketing Federation. "Private traders will not go much below the State government price, so farmers won't be completely swindled. Unquestionably, the MCPS is the only security farmers have," Sandhu told Frontline. "But we are buying the cotton at Rs.425 more than the Central government's MSP of about Rs.1,675 and selling the cotton at about Rs.1,500, which is causing us a 25-30 per cent loss. The scheme will work only if it makes a profit and if the farmers are paid the entire amount in one instalment," he says. The Federation has not begun buying this year's crop as yet. Some farmers are holding back from selling their crop because the MCPS price is a security. "We will wait and see what the price is, otherwise private traders can swindle us," says Namdev Kamble, a cotton farmer from Wardha.

Some farmers cannot afford to wait for too long. Farmers like Champat Raut, who are in deep debt, have been forced to sell their produce to private traders, who often double as moneylenders. "I need the money to feed my family, pay workers, buy seeds, pesticide and fertilizer. I cannot wait for the government's instalments. Interest is accumulating at 50 per cent annually on my loan," says Raut. "Besides, the government deducts the bank loan amount from the payment. That leaves me with very little, so I might as well sell it to a private trader." Raut, who owns 25 acres (10 ha) of land, says that normally the moneylender is prepared to take the crop if he cannot repay the loan. "But this year the moneylender wants only cash."

Raut has sold 12 quintals of cotton to a private trader at Rs.1,875 a quintal, much lower than what he would get if he sold it to the Federation. He has a Rs.50,000 bank loan, on which he pays nearly 16 per cent interest. He owes another Rs.30,000 to a moneylender and has several credits pending at shops that have sold him seeds, pesticide and fertilizer. Raut attempted selling some of his land to pay his debts. But he found no takers. "I think it is better to leave this world than to carry on like this," he says. While his cost of production has gone up substantially, the price of cotton has only reduced. His cultivation costs are about Rs.3,000 an acre and this year he got hardly three quintals an acre. As cotton is highly susceptible to pest attack, a substantial amount of money is spent on pesticide.

"There is a growing sense of desperation this harvest season," says Jawandhia. "Unless the government declares the region drought-hit, there are very few options available." Farmers pay an 8 per cent premium on their bank loans towards crop insurance. Only if the drought is declared officially, the banks will allow them to claim insurance.

Furthermore, says Jawandhia, if a farmer wants to switch to a crop like soybean, he cannot afford it because the banks will not give him a loan until he repays the pending loan. But with no pressure groups to influence the government on their behalf, and with little sign of the Central government amending its liberalised policies, the future looks bleak for the cotton farmers of Vidarbha.