A key objective of India’s economic liberalisation of the early 1990s was to revitalise the country’s sluggish agriculture sector by integrating the economy into global capitalist systems. These economic changes sought to boost agricultural production by introducing farmers to modern technology and new agricultural practices and allowing greater access to financial credit.
The role of institutions – social, legal, political and economic – was realigned to increase market efficiency and especially aimed at diminishing the role of the government and its regulators. But in the years following market liberalisation, India’s agricultural sector neither experienced any substantial growth nor did it produce the anticipated incentives for farmers. It was instead hit by an unprecedented agrarian crisis that has severely affected people in the farming sector, especially landless labourers and cultivators who are small – farmers with less than 2ha of land – and marginal – farmers with less than 1ha of land.
A 2007 report on agricultural indebtedness commissioned by India’s Ministry of Finance showed a “distinct slowdown” in agricultural growth since the 1990s, despite substantial growth in the economy. Concluding that the agriculture sector was going through a “severe crisis”, the report stressed that swelling input prices, weak support systems and falling profit made cultivation an increasingly risky activity and threatened the livelihoods of farmers.
“In the present liberalised trade and market regime, farmers are exposed to price volatility because of fluctuations in domestic production and wide fluctuations in international prices. Currently no adequate and effective risk mitigating measures exist to counter the adverse impact of such fluctuations,” the report said, adding that the crisis had been exacerbated by rapid environmental degradation and the plateauing of existing agricultural technology.
An epidemic of suicides
The scale of this crisis can be gauged by the number of farm worker deaths by suicide in the three decades since liberalisation. According to the National Crime Records Bureau, which collates statistics from state governments, over 300 000 farmers have ended their lives between 1995 and 2014. These figures suggest that, on average, about 16 000 people in the farming sector died by suicide each year. The bureau recorded as many as 10 281 farmer suicides in 2019 and 10 357 in 2018.
Research points to indebtedness as the single biggest factor driving cultivators to end their lives. A 2003 situation assessment survey of farmers conducted by the government found that nearly half the farmers in the country were in debt. “Out of 89.35 million farmer households, 43.42 million (48.6%) were reported to be indebted,” it noted.
Various studies have offered different explanations for the high levels of indebtedness among farmers, including the rising cost of cultivation, crop failures, decline in institutional credit, drought, floods, the control of seed supplies by corporate chemical industries, dependence on non-institutional sources of credit, unstable farm income, water paucity and trade liberalisation.
“The wave of farmer suicides that have swept across India since the mid 1990s is a plain and simple case of [a] policy-induced disaster of epic proportions. Adoption of neoliberal policies like reduced public investment in agriculture, withdrawal of institutional credit to rural areas, opening up the agricultural sector to global trade, neglect of irrigation facilities and allowing the rampant commercialisation of agricultural inputs have contributed to the development and deepening of [an] acute agrarian crisis,” argues the Sanhati collective, which provides analyses of India’s political economy, in Farmer Suicide in India: A Policy-Induced Disaster of Epic Proportions.
Farmers with certain socioeconomic attributes, such as cash-crop cultivators working small pieces of land while managing debt, are at particular risk of dying by suicide. A study based on 2014 data from the bureau found that 44.5% of those who died by suicide were small farmers and 27.9% were marginal farmers, together accounting for 72.4% of total farmer suicides that year.
Another study conducted in the state of Maharashtra, which has recorded a high number of cases, found that most of the people who ended their lives were deemed low- and medium-caste farmers and were often smallholder cultivators. Although engaged in wide-ranging agricultural activities, people deemed lower caste were either tenants or tenants-cum-owners. Farmers considered upper caste were also found to be unwilling to share their agricultural knowledge or skills with those considered lower caste. Caste is a social regulator in Indian society. Those labelled lower caste primarily compose the permanent workforce, whereas those deemed higher caste control decision-making and resources.
An increasing number of women farmers are also dying by suicide, driven by reasons ranging from being forced to take on the mantle of breadwinner without adequate government support to high farm debt. They are often denied land rights or deemed ineligible for compensation. Some reports have found that microfinance institutions have aggressively targeted women in the most vulnerable parts of the country, often encouraging them to take multiple loans. Members of women self-help groups are also pressured to stand as guarantors for loans issued by microcredit companies. When the borrowers default, companies ask these guarantors to pay up, making many women feel helpless and driving them to suicide.
The historical context
Prior to India’s independence, the agriculture sector suffered from what scholars termed “built-in depressors”. Zamindari, or rich landlords, extracted high rents from marginalised small cultivators, creating massive inequality and asymmetrical power relations. After independence, the Indian government under its first prime minister, Jawahar Lal Nehru, put greater emphasis on the heavy industries, which were then assumed to stimulate other sectors, including agriculture.
But, after a brief increase in production in the 1950s and early 1960s following favourable monsoon seasons, agricultural production stagnated by the mid 1960s, and two consecutive poor monsoons between 1965 and 1966 pushed the country to the brink of famine.
The failure to improve agricultural productivity was attributed to a lack of political micro foundations, which were required for any earnest implementation of Nehru’s institutional strategy. Much of the implementation was down to state governments, which had become the fiefdoms of rich landlords in cahoots with bureaucrats considered upper caste who kept intact the power status quo between lower and upper castes.
Likewise, no progress was made on land redistribution or reforms. Instead of the impoverished controlling local governance, India’s rural political system of panchayat raj – in which villages are supposedly self-governed – became yet another institutional setup through which the “influential” class and castes exerted their power, further enfranchising the rich and weakening the impoverished and marginalised. By the mid 1960s, the land owners had grown further in political power at state levels, having captured most of the benefits of Nehru’s institutional strategy.
The liberalisation of the agricultural sector in the early 1990s and shift in economic priorities of the government only accelerated the agrarian crisis. “The adoption of the neoliberal model of capitalism by the ruling elite in India since the early 1990s have led to distinct aggregate-level institutional and policy changes related to public investment, input subsidies, organised credit and external trade; these policy changes have negatively impacted on the incomes of small and marginal farmers while their essential expenditures have continued increasing. Stagnant incomes and rising expenditures have led to pressures of mounting debt, creating acute distress that often lead to the extreme step of suicide,” notes the Sanhati collective article.
The 2000 National Agricultural Policy announced by the government aimed to give a prominent role to contract farming, which is an agreement between farmers and marketing firms for the production and supply of agricultural products under forward agreements, often at predetermined prices. This led to the further “corporatisation” of Indian agriculture and adversely affected the small and marginal farmers as contract farming became a tool for the agribusiness firms to exploit an unequal power relationship with growers.
A global capitalist trap
The growing agrarian crisis has come about not only as a result of the capitalist development India pursued, but also because of the way global capitalism was brought in, connecting weak and marginalised farmers with larger global markets.
Indian Marxist scholar Utsa Patnaik has directly linked agrarian distress to liberalisation and imperialist globalisation, which focuses on satisfying the requirements of developed countries. She notes a marked shift in agricultural production towards meeting export demands because of this strategy, which creates an inverse relationship between promotion of agricultural exports and domestic food availability. The producers in low- and middle-income countries are also often “forced” into unfair trades.
The decades-long agrarian distress and resulting farmer suicides clearly shows India’s liberalisation process has had an adverse effect on small landholding and weak and marginalised farmers and labourers. By linking the small agro-producers with global markets, the competitive or more often predatory nature of big agro-firms has not only created disparity, but also constantly pushed local farmers into the vicious circle of debt. Financial institutions such as banks, microfinance institutions and cooperatives have only aggravated the indebtedness.
From their experience of market liberalisation, Indian farmers now clearly understand that when marginalised, impoverished farmers are exposed to global capitalism, they are more vulnerable and left without any access to help from the government or other institutions. In the continuing protests at the borders of Delhi, farmers have emphasised the prospect of losing even more to big agri-firms with three new agriculture laws introduced by the Narendra Modi government.
Although the government claims that the new legislation will benefit the farmers, the cultivators have argued that the laws will help only the big corporations. “Just like the big fish eat small fish, big businesses will eat us up now,” Rakesh Vyas, a farmer camping at the Sidhu border, told the BBC.
“The laws have given corporate houses direct entry into agriculture,” another farmer, Narpinder, told the Indian Express newspaper. “Already, for crops with no [minimum support price], we are at the mercy of private players. Once these new laws come in, that will happen in [the] case of all crops. I am very worried and insecure about my future.”
As much as it is challenging Modi’s ruling dispensation, the banner of revolt by the farmers is equally pitted against the global capitalist regime.