Steps To Resolve the Suicide Crisis among India's Farmers

June 19, 2017

Courtesy of Naveen Kumar Emmadi

Farming in India is a tough profession. In 2015, government statistics reported that over 12,000 farmers committed suicide, with bankruptcy/indebtedness cited as the top reason for ending their lives; sadly, this trend has been on an upward trajectory in the past few years making this one of the most pressing ethical issues for this generation of Indians. There are many contributing factors: droughts, illiteracy, bureaucratic apathy, disease, and lack of technology and capital resources, to name only a few. India should consider three solutions as steps towards resolving this crisis.

First, India must pass a nationwide law to codify tenant farmer rights. Decades ago when India received independence from the British, several land reform laws were passed to ensure that farmland was redistributed from landowners, who owned large farms, to individual farmers and to eliminate exploitation by discouraging tenancy. This was meant to transfer ownership to the people and to incentivize farmers to increase efficiency, which aligned well with India's socialist ideals. In reality, not all the land was fully redistributed and the lack of tenancy rights forced farmers to make informal agreements with large landowners to continue farming. This caused a large segment of the farmer class to be not only excluded from ownership, but also become prey to arbitrary rents and evictions from their 'leased' land. Another effect was that it led to under-the-table agreements between tenants and landowners, and without proper lease documents, most farmers were unable to receive government-subsidized products. This includes crop insurance that could make farmers less susceptible to bankruptcies when crop harvests are below expectations.

Second, India must stay committed to free market policies and develop localized solutions. In the past three decades, there have been several bailouts, each forgiving billions of dollars in farmers' debt. Although the bailouts provide much needed immediate relief, in the long term they do three things: first, they exacerbate the problem as bad players continue to make the same loans instead of being put out of business. Second, they increase the pressure on government finances which raises interest rates overall and limits future capital availability. Third, they create a moral hazard as politicians may use bailouts to win elections. A smarter approach would be to partner with banks to educate farmers on how to secure loans without the assistance of a middleman (currently, middlemen may be the only channel to receive a bank loan and can charge up to 10 percent of the principal). Further, the government should help state-sponsored organizations to invest in technology to allow farmers to access loans via smart phones which are widely accessible to farmers. Another option for the government is to develop peer-to-peer networks of farmers to pool capital to make farm loans and to reduce loan default as all members have skin in the game.

The third area that the government must invest in is reskilling farmers, which is an incredibly complicated effort. Over 600 million Indians are involved in agricultural and related activities even though agriculture makes up only 17 percent of India's GDP; this makes farming the least productive and least lucrative profession as millions of farmers work on small plots of farmland using only human or animal muscle. Current market forces are shifting farmers off their land and into the cities, where there are opportunities for unskilled laborers. The drawback of this migration is that some cities have become significantly overcrowded leading to slums and over-burdened water and sanitation resources. In the long run, migration could also increase economic disparity between the cities and rural areas as city dwellers can command higher wages, own property with skyrocketing values, and have access to far more career broadening opportunities. The government has made some progress through the National Rural Employment Act to provide farmers with non-farming options in their local towns. This program entitles every rural household the right to 100 days of minimum-wage employment per year. Yet while there has been some success in delivering stable income to recipients, in some states a shortage of available work still persists. Additionally, sustaining this program could be challenging in the coming decades with planning and capital being top concerns. A creative solution to reskilling farmers could be to explore methods to transition some of them from agriculture to the healthcare sector. In rural areas many have little or no access to private clinics or hospitals or government rural health clinics—of which more are needed. Compounding this problem, the rapidly shifting demographics will push millions toward senior status in the next few decades, increasing the need for healthcare providers such as nurses, physician's assistants, and counselors (Indians currently regard mental health as a taboo subject, but as attitudes change, the need for counselors will increase). Many of these professionals could provide services locally to help the sick and elderly instead of moving to cities. The private sector could offer low cost training solutions via MOOCs or the government could establish vocational schools in local communities to provide high-intensity condensed training curriculums, while incentivizing healthcare facilities to hire farmers as they transition to new roles. Certainly, not all struggling farmers will make this transition, given the high degree of proficiency that most of these positions require. Nevertheless, such training programs could both provide some farmers with new employment and help India achieve its goal of providing care for all its people.

These proposed changes will not serve as a silver bullet for stopping farmers from committing suicide but they will help resolve many of the root causes. We hope that India will move with greater speed to improve the lives of millions of people who have been untouched by India's rapid ascent.

blog comments powered by Disqus