Another take on Suicides by Farmers

Suicides by farmers are said to be indicators of general agricultural distress. P Sainath has written extensively on the matter (recent articles are here and here). He estimates 100,000 suicides over the past 14 years. Ajit Balakrishnan too wrote a column, based on a book he had read. I was unable to acquire the book so will rely on his column.

Based on the writing of these two authors and other media reports one can attempt to reconstruct the profile of the farmers who took their lives. What we can gather is that they were land owners (not landless), had frequently leased-in additional land, invested in irrigation and had borrowed sums which by Indian standards were not inconsiderable – several lakhs of rupees in many (most?) cases. The farmers didn’t fall into penury immediately either - they did make money and used it for consumption and to increase their scale of operations.

So what goes wrong? At some stage income suffers due to production declines (pests, water scarcity) or adverse price movements. Or expenses mount due to marriage or illness. There is little cushion and an inability to meet interest and principal repayments or even lease amounts.

This, harsh as it may read is the world of the aggressive farmer-entrepreneur. A risk taker whose calculations can and do go wrong. Unfortunately the leveraged nature of the enterprise leaves little room for tidying over or recovery. Not that only farmers are prone to this. Large sections of the corporate sector periodically go through the same. And this is a familiar tale in financial markets where over-leverage has led to the downfall of many a trader including Nobel prize winners but seldom with such tragic endings.

Note also that it is not agricultural labourers or the truly marginal farmers who commit suicide though they suffer endemic hunger and acute destitution. It is the farmers who are better endowed. Further, the phenomenon seems to be largely prevalent in select, not all parts of Andhra Pradesh, Karnakata and Maharashtra. By no means are these the poorest parts of India.

Why distress leads to suicide is the other part of the puzzle. This author can add precious little to that discussion except refer to a fascinating discussion on the subject in The Tipping Point by Malcolm Gladwell.

The intention of this note is not to blame the victim but to try and understand the genesis of the problem. Only then can we find a proper solution and avoid potential problems as with micro-financing, now very much a rage in India.