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Untangling The Noose Around The UP Farmer’s Neck

Why farmers are killing themselves in Uttar Pradesh.

12/07/2017 8:50 AM IST | Updated 12/07/2017 8:50 AM IST
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In the past few weeks, I have had the opportunity to travel across more than 10 districts across Uttar Pradesh and hold kisan panchayats in an effort to understand the reason for farmer suicides across India and specifically in the state of UP. The facts that have come to the light point to a story of broken electoral promises, official manipulation and downright negligence, forcing lakhs of farmers into destitution and despair, sometimes leading to suicide.

Farming employs a major portion (estimates vary) of the Indian workforce. This population is now under undeniable duress. Farmers across Uttar Pradesh are reeling due to issues ranging from insufficient support prices which fail to meet even the input costs, exploitation by middlemen, increase in urea prices, abysmal state of electricity supply, illegal or forced land acquisition, inadequate compensation, non-procurement of food crops by the government, issues related to cattle, ever mounting bank loans, erratic government legislations and the list goes on and on...

I will try and distil the issues into some broad categories to try and understand the nature of the ever tightening noose around the farmer's neck.

Inability to recover input costs and related issues

Potato farmers are being driven to suicide in Western and Central UP. A major reason is that the government's stated MSP for potatoes of ₹487 per quintal is less than HALF of the input costs of the farmers, which is nearly ₹1000 per quintal (cost calculations provided by Uttar Pradesh Kisan Sabha—refer cost chart).

Potato farmers are being driven to suicide... A major reason is that the government's stated MSP for potatoes of ₹487 per quintal is less than HALF of the input costs...

The situation is desperate as the next season is already here and the farmers are still sitting with almost 100% stocks from the previous season, leaving them with no money to sow this year as they have been unable to pay off last year's dues. This is due to the fact that the government is not buying the stocks thus forcing farmers to sell to private traders at a huge loss of ₹250-300 per quintal and forcing them into major debt.

This glut in the market is due to the fact that every year the traders, who used to buy 50 to 60% of the produce staying away from large cash transactions post-demonetisation. This sector is heavily cash driven and due to the cash crunch which is persisting till now, plus due to fear of scrutiny, the traders are not buying their regular share. Coupled with non-procurement by the government, this has resulted in 100% produce lying with the farmers.

To further compound the misery, cold storage owners charge excessive fees for storing produce. Till 1997 the price of storage was regulated by the government. In 1997, under pressure from the cold storage owners' lobby, the price was deregulated. Prices over the years have more than doubled from ₹46 to ₹115 per packet (50kg). In such a scenario many small farmers prefer to throw their produce rather than put it in cold storage due to uncertainty in procurement.

Even other vegetables such as okra and cauliflower are rotting as no one is buying and farmers are forced to either sell at a loss or forced to surrender their produce to cold storage owners in lieu of the storage charges.

Dhaan (rice) farming is also suffering as the government is not procuring at the earlier prices of ₹1600-1800 per quintal—the current rates are ₹1400-1500 per quintal.

This against the backdrop of electoral promises of an increase in MSP up to a level of 1.5 times of the production cost of the farmer, seem like a cruel joke.

Meanwhile, sugarcane farmers across the sugarcane belt are also suffering due to closure of sugar mills and non payment of dues by mill owners running into crores.

Uttar Pradesh Kisan Sabha

Increase in urea prices

The prices of urea have been increased from ₹1100 to 2000 per bag with the additional amount to be returned in form of subsidy directly in bank accounts. This has posed serious challenges for the farmers as the upfront cost has almost doubled. Secondly, the subsidy comes in 3-4 months post the expenditure which means that for the entire sowing season the expenses for the farmers nearly double. Lastly a vast number of farmers have not even started receiving subsidies in their accounts due to issues with bank accounts, KYC etc.

Rising electricity prices and decreasing supply

In areas like Greater Noida, which are near cities, the farmers are being forced to pay city rates of 5 per unit and not the agricultural rate of 1 per unit.

Private electricity companies are charging exorbitant rates. For example, in Agra till a few years back ₹2500 was the standard rate for tubewells; now, the government has given the power to private players that demand much higher rates, thus forcing every village into electricity debt worth lakhs. This coupled with the fact that the electricity situation in villages has worsened in the past few months, with the average duration of power availability restricted to just 7-8 hours, and that too without any fixed schedule. This has wreaked havoc on farm life, with tubewells and threshers being run on diesel generators, further increasing costs.

Failed promises of farm loan waivers and bank notices

During the recent elections in UP, every political party promised to waive farm loans unconditionally. However under the current scheme the waiver applies only for farm loans taken for paddy, wheat, fertilisers and insecticides, leaving out loans taken for irrigation, other cash crops, labour wages and other farm expenses.

Only a small percentage of loans have been categorised as NPAs, leaving out the neediest farmers who have been unable to pay their loans for a long time. This is tantamount to a sleight of hand...

Also, as per government estimates ₹36,000 crores was the cost of the scheme, with ₹30,000 crore for farm loan waiver and ₹6,000 crores for NPA loans. However the government has decided that the eligibility is for farmers who took crop loans until 31 March, 2016 and that too with a cap of ₹1 lakh. All of their remaining amount owed to the banks until 31 March, 2017, will be paid by the government.

There are two main issues. Firstly, the cap of ₹1 lakh itself is a severe restriction but the date of 31 March 2016 leaves out the loans taken in the rabi and kharif seasons for 2016-2017. Also, the promise to waive NPA loans has been manipulated as the banks typically at the beginning of new financial year renew NPA loans and categorise them as active loans in order to cleanse their books. Only a small percentage of loans have been categorised as NPAs, thus leaving out the neediest farmers who have been unable to pay their loans for a long time. This is tantamount to a sleight of hand from the government, turning the promise of farm loan waiver into a conditional nightmare. Meanwhile, regular legal notices from the banks and threatening calls from collection agencies have driven the farmers to suicide due to a sense of helplessness and shame at being unable to repay the loans.

"Gau-raksha" side effects

The bans on cattle slaughter and on transportation of cattle across states (which are being violently enforced by bands of cow vigilantes) have led to hundreds of stray cattle roaming the fields and destroying standing crops. Farmers are abandoning their cattle due to the absence of secure and robust resale values for non-productive cattle. Quoting from a Wire article on the topic

"A high resale value of an animal exists if it is still work-worthy (or has good potential for reproduction and milk yield). It is then purchased by another farmer or, if no other farmer buys the animal, farmers have always been able to rely on selling their animals to traders who supply animals to slaughter houses. The economic value of an animal, despite it not being purchased by another farmer, exists because of all post-farm downstream economic values of the cattle economy after slaughter: cattle beef as a critical part of food cultures and a cheap source of protein, cattle skin the basis of India's thriving leather Industry valued at US $ 17.8 billion, generating 95% of India's foot wear needs, and its offals used widely in the pharmaceutical and manufacturing industries."

Unemployment in rural youth

Many farmers take loans, sell land and endure hardship to educate their children. However, upon graduation many rural youth are unable to find jobs. This in the backdrop of the unfulfilled 2014 poll promise of creating 1 crore jobs a year. To add insult to injury, when land is acquired from farmers to set up universities or projects, then their children instead of getting preference in education or employment are actually denied admission. They are deemed "locals" and rejected. This is the last straw in the minds of many youth who in desperation either turn to crime or commit suicide.

We need to remember that if the hands that feed us are forced to beg for their rights then it won't be long before pleas for justice become cries of revolution...

For a nation built on the values of "Jai Jawan-Jai Kisan", it is indeed an irony that every year thousands of farmers are forced to die in desperation and destitution. We need to remember that if the hands that feed us are forced to beg for their rights then it won't be long before pleas for justice become cries of revolution and the hands that plough the lands are forced to wield the gun!

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