musings on agriculture in maharashtra

7/30/2019 Musings on Agriculture in Maharashtra

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Anukool Chavhan

Founder, Asmita Agribusiness

4/16/2013

Musings on Agriculture in Maharashtra


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Contents

I. Maharashtra at a Glance ....................................................................................................................... 3

II. Major Crops & Cropping Pattern .......................................................................................................... 7

Introduction: ............................................................................................................................................. 7

Cropping Pattern: ...................................................................................................................................... 8

Performance of the Agro Sector: .............................................................................................................. 9

III. Irrigation & Associated Controversy ............................................................................................... 11

Introduction: ........................................................................................................................................... 11

Irrigation Potential and Actual Area Irrigated: ....................................................................................... 12

IV. Agricultural Finance ........................................................................................................................ 14

Introduction: ........................................................................................................................................... 14

1. Organized Finance:...................................................................................................................... 14

2. Unorganized Finance: ................................................................................................................. 15

V. Analyzing Farmer Suicides .................................................................................................................. 16

Introduction: ........................................................................................................................................... 16

Scenario in Maharashtra: ........................................................................................................................ 17

Socio-Economic Strata of Farmers Committing Suicides: ................................................................... 17

Investigating Reasons for Farmer Suicides: ............................................................................................ 18

Microscopic Analysis: .......................................................................................................................... 18

Macroscopic Analysis: ......................................................................................................................... 19

Non-Availability of Institutional Finance: ........................................................................................ 19

Low Irrigation Penetration: ............................................................................................................. 19

Regional Politics: ............................................................................................................................. 20

Lack of Quality Inputs and Extension Services: ............................................................................... 21

Lack of Post Harvest facilities: ......................................................................................................... 22

Indirect Causes: ............................................................................................................................... 22

VI. Policy Suggestions ........................................................................................................................... 23


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I.

Maharashtra at a GlanceThe state of Maharashtra was formed in 1960 and occupies the central and western region of India. It isthe second largest state in India both in terms of population and geographical area (3.08 lakh sq km).The State has a population of 11.24 crore (Census 2011) which is 9.3 per cent of the total population of India. The State is highly urbanized with 45.2 per cent people residing in urban areas.

The State has 35 districts which are divided intosix revenue divisions viz. Konkan, Pune, Nashik,Aurangabad, Amravati and Nagpur foradministrative purposes. The State has a longtradition of having statutory bodies for planning atthe district level. For local self-governance in ruralareas, there are 33 Zilla Parishads, 351 PanchayatSamitis and 27,906 Gram Panchayats. The urbanareas are governed through 26 MunicipalCorporations, 219 Municipal Councils, 7 NagarPanchayats and 7 Cantonment Boards.

Mumbai, the capital of Maharashtra and thefinancial capital of India, houses the headquartersof most of the major corporate & financialinstitutions. India's main stock exchanges & capital market and commodity exchanges are located inMumbai.

The gross state domestic product (GSDP) at current prices for 2011-12 is estimated at ` 11,99,548 croreand contributes about 14.4 per cent of the GDP . The GSDP has been growing at a rapid pace over thelast few years. Presently industrial and services sector both together contribute about 87.1 per cent of the States income. The agricultur e & allied activities sector contributes 12.9 per cent to the Statesincome.

The State has 226.1 lakh hectares of land under cultivation and area under forest is 52.1 lakh hectares.Numbers of irrigation projects are being implemented to improve irrigation. A watershed mission hasbeen launched to ensure that soil and water conservation measures are implemented speedily in thenon-irrigated area .

Animal husbandry is an important agriculture related activity. The States share in livestock and poultrypopulation in India is about 7 per cent and 10 per cent respectively.


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II.

Major Crops & Cropping Pattern

Introduction:In the last few years the Indian economy has been marching towards becoming an economicsuperpower, yet, there is no denying that this welcome surge in the economy is accompanied bystagnation, even retrogression, in the agriculture sector. The setback to agriculture at the national levelhas been reflected in Maharashtra as well. There are nine to ten districts (out of 33) in Maharashtrawhere the per capita income is 35 to 40 per cent lower than the national average. While the proportionof population below the poverty line is around 27 per cent at the national level, this proportion isactually higher at around 30 per cent in Maharashtra. While the share of agriculture in the overall GDPhas fallen to around 17.5 per cent in 2007-08 at the national level, the same has fallen in Maharashtra toonly around 12 per cent. While at the national level, irrigation is around 38 per cent of the cultivableland, the same in Maharashtra is only around 17% (13.4% according to independent sources). In termsof yield per acre, the State of Maharashtra is ranked 14 th , 16 th , or 18 th for most crops barring theexception of banana, grape and sugarcane. In other words, the much-needed rejuvenation of theagriculture sector at the national level is necessary even more so for the State of Maharashtra.

In Maharashtra, agricultures contribution to net state domestic product in current prices has reducedfrom 40 per cent in 1960-1 to 12.4 per cent in 2011-12 whereas as per the 2001 census 55 per cent of the total workers are either cultivators or agricultural labors. During 1993-4 to 2003-4, the linear trendgrowth rate of Maharashtras Gross State Domestic Product (GSDP) at 4.8 per cent per annum was lowerthan that of Indias Gross Domestic Product (GDP) at 5.8 per cent per annum. During the 11 th Five YearPlan (FYP), an average agricultural growth rate of 4.3 per cent was achieved.

The eight major crop groups in terms of gross area under cultivation are Cereals with nearly half of itunder Jowar, Pulses, Fiber (mostly Cotton), Oil Seeds (nearly half of it under Soybean), Sugar cane, Fruitsand Vegetables, Condiments, Spices, Drugs and Narcotics etc. There are four divisions in Maharashtraindicating the crop specialization. In which, Western Maharashtra consists Sugarcane, Wheat, Onionsand other irrigated crops, Konkan region is famous mostly for Paddy and Fruits, Marathwada consistingCotton, Pulses and Oil Seeds while Vidarbha cultivating mostly the Cotton, Arhar and Soybean.

Western Maharashtra is more irrigated as compare to rest of the Maharashtra. As a result, the incomeof the farmers of the Western Maharashtra increased and thereby standard of living throughemployment generation in agriculture sector i.e. Animal Husbandry, Dairy, Poultry and Goat Farming.Also the political leadership of Western Maharashtra has the greater say and dominance in the statepolicy as compare to other regions of the state. It is one of the reasons of the agricultural developmentof the region. The successful organization of co-operatives also strengthened the efforts of the farmersin Western Maharashtra. However, the co-operative movement did not acquire expected success inMarathwada and Vidarbha regions of the state.


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Cropping Pattern:The trends in cropping pattern for major crops in Maharashtra can be summarized as below:


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Performance of the Agro Sector:Admittedly, as any developing economy makes a transition towards a developed status, the share of itsagriculture sector in GDP declines. This is borne out by the accumulated experience worldwide.However, in India the rate of decline has been abnormally rapid. Furthermore, going by the experienceworldwide, pari passu with fall in the share of agriculture in GDP, the proportion of population

dependent on agriculture also declines. This phenomenon does not seem to have occurred in India toany significant extent. Illustratively, while in 1951, nearly 75 per cent of the Indian population wasdependent on agriculture, nearly two-thirds of our population continues to depend on agriculture forsubsistence even today.Inevitably, this anomaly has led to widening of disparities as between rural vs. urban or Bharat vs. India. The agriculture sector in India has remained largely insulated from the comprehensive reforms initiatedin the aftermath of the unprecedented macroeconomic crisis of 1991. Inevitably, this has been reflectedin a widening gap between the growth rates of agriculture, industry and services as depicted in the Tablebelow:

Public Investment in agriculture has consistently been falling. Illustratively, the share of the Agricultureand Allied sector averaged around 13.1 per cent during the first 5, Year Plans (up to 1980). In contrast,for the next 5, Year Plans (up to the 10th Five Year Plan), the share of Agriculture and Allied sectoraveraged only 5.4 per cent. The private investment pattern has followed suit. Decelerating public andprivate investment in agriculture has invariably led to falling rates of usage of agricultural inputs asdepicted in following table:


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As a combined effect of above phenomena, the yields of all major crops in India are below the worldaverage of major producing countries.

Decelerating agricultural growth rate, falling productivity of the farm sector, surge in food grains prices,reduced per capita food grain availability, widening rural urban divide and above all, the alarmingincrease in the incidence of farmers suicide, all point to the imperative need for a comprehensive set of measurers for rejuvenation of the farm sector and for farmers on a scale that could possibly constitutethe Second Green Revolution. Unless concerted efforts are made in this direction, urgently, there is areal danger of social instability, which would inevitably jeopardize the sustainability of the overall GDPgrowth momentum.

The much-needed rejuvenation of the agriculture sector at the national level is necessary even more sofor the State of Maharashtra.


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III.

Irrigation & Associated Controversy

Introduction:Irrigation plays an important role in increasing the productivity of agriculture and making it profitableand sustainable. Irrigation can be from dams (lift, canal, etc.) or groundwater (wells, bore wells, etc.).Maharashtra is the state with the largest number of big dams in India: the state has 1845 large dams,which is about 36% of Indias total number of dams. Incidentally, the second ranked state in terms of number of large dams, namely Madhya Pradesh, does not have even half the number of large dams thatMaharashtra has. Just goes to show the dominance of big dam agenda in Maharashtra. 92% of theMaharashtra dams are exclusively for irrigation, an additional 4.5% dams have irrigation as one of theobjectives, along with other objectives like water supply, hydropower or flood control. Over 40% of Indias under construction dams are also in Maharashtra. The state has spent about Rs 75000 croresover the last decade and will need to spend about Rs 76000 crores to complete the under constructionprojects. So the size of the sum involved is more than Rs 150 000 crores if all the projects were to becompleted as envisaged now.

According to Government figures, the net area irrigated in Maharashtra in 1999-2000 was 32.96 lakh ha,which in the latest reported year of 2009-10 is 32.54 lakh ha. So in this whole decade, there is noincrease in net irrigated area in the state, when the state has spent over Rs 75000 crores in the period.So after spending all this money the state has not increased irrigated area at all. Moreover, in just fiveout of this ten year period (i.e. 2005-06 to 2010-11), the state economic survey for 2011-12 says,subsidies have been doled out to provide drip irrigation in 1.95 lakh ha and for sprinkler irrigation in 4.17lakh ha, thus covering a total area of 6.12 lakh ha in these five years at an expense of Rs 1134.82 crores.

This expenditure was also supposed to help save water use in irrigation and thus provide additionalwater for irrigating more areas, but even that has not happened. The ratio of gross irrigated area togross cropped area for 2008-09 in the State was 17.7 per cent, which was much below the National levelratio of 45.3 per cent. So the state having the largest number of dams in India, almost all of which aresupposed to be for irrigation, performs 60% below national average in terms of proportion of areairrigated.


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The graph above is based on the figures given in the Economic survey and show the irrigated area forthe last decade, for ground water irrigation, Irrigation by other sources (this category includes major,medium, minor (state and local level as classified in Maharashtra)) and also total net and gross irrigatedarea in the state. The flat graphs for all the four sets of figures and for whole of the decade andparticularly the bottom graph which include irrigation by Major and Medium irrigation projects tell the

story of lack of growth in area during the period.

Irrigation Potential and Actual Area Irrigated:Table-2 presents information about completed & on-going state level as well as local sector projects. Total

47.37 L. ha potential has reportedly been created up to June 2010 through state level completed projects

spending Rs. 48500 Cr. Similarly, 14.20 L. ha potential has been created through 65199 local sector completed

projects. About 750 state level projects are still under construction & it is estimated that around Rs.75000 Cr.

would be their balance cost.

Theoretically speaking, Irrigation Potential is said to be CREATED only when the project is complete.MWIC in its report (Vol.-1, Para 5.7, `Completing incomplete projects') has defined Completed Project.As per that definition completing a project means following:

1.

Actual handing over of the project from construction organization to management organizationas per the technical circulars of WRD, GOM


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2.

Verification of design carrying capacity of canals & distribution network by actual flowmeasurement and issuing formal certificate regarding the same.

3.

Completion of Techno-Socio- Economic-Legal (TSEL) processes for proper O & M of the project.4.

Formal acceptance of Project Completion Report by WRD,GOM5.

Formal issuance of notification by WRD, GOM to declare that project is complete & then official

handing over of project to the State/Nation.

MWIC further says that a project is said to be complete if it achieves the objectives assumed in itsdesign. In short, what matters is completion of processes & thereby achieving results & not merecompletion of construction! If this definition of completed project is to be adhered to then there ishardly any irrigation project in Maharashtra which is complete in the truest sense of the term. It is anunfortunate fact that in most of the projects, irrigation potential is declared as CREATED even if thecanals & distribution network and works related to command development are incomplete.

Actual Irrigated Area (AIA) Data of AIA for last 14 years is available in ISRs. That data is presented inTable above. The following inferences can be drawn:

1.

There is no apparent correlation between variation in live storage & area irrigated.2.

AIA is significantly less as compared to CIP & Total Cultivable Area.

a.

Average AIA (Canal + well) is 53.7% of CIP.b.

Average AIA (only canal) is hardly 37.3% of CIP.c.

Average AIA (Canal + well) is 9.4% of Total Cultivable Area.d.

Average AIA (only canal) is 6.4% of Total Cultivable Area.

Prima facie, things look misleading with the usage of CIP instead of AIA. However, almost all governmentdocuments use CIP and the increase in it over the past years without mentioning the stagnation in AIAdespite heavy investments in large scale irrigation projects.


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IV.

Agricultural Finance

Introduction:Most of the farmers are not in a position to fund their entire farming costs through available cash. Thus,most of them depend on timely credit to procure inputs for farming. The source of credit could beorganized (banks, SHGs, Credit Society, etc.) or unorganized (moneylenders, relatives, etc.).

1. Organized Finance:Financial assistance is provided to farmers by way of short-term loans, credits, etc. by governmentthrough various banks and co-operative agencies. The National Bank for Agriculture and RuralDevelopment (NABARD), the apex bank for agricultural & rural development in the country, plays pivotalrole in development of agriculture. The activity wise loans disbursed by Commercial Banks (CB), RRBs,MSCB/DCCB/ LDB are given in Table below:

The financial institutions directly associated with agricultural finance at grass root level in theState are Primary Agricultural Credit Co-operative Societies (PACS) extending short-term croploans to their cultivator members. During 2011-12, amount of loans disbursed was less by five

percent compared to the previous year. Out of the total loan,`

4,035 crore (53 per cent) wasdisbursed to small and marginal farmers. The year wise loan advanced to farmers by PACS isgiven in the following Table:


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2. Unorganized Finance:Unorganized Finance is prevalent in the rural regions despite the high interest rates as it involves nopaperwork and the cash is readily available. Farmers depend on the local sahukar (moneylender) forsuch informal loans. These loans may be for farming inputs or any other personal reasons like medicalemergency, marriage, etc.

Informal loan transactions could be in dedhi . The debtor has to return the loan around harvest (withinfour to six months) and pay Rs.150 for loan of Rs.100. Similarly, there is sawai (payment of Rs.125 forloan of Rs.100). Another popular form of loans for agricultural and social purposes is at an interest rateof Rs.10/Rs.5 per month. In this case the interest is calculated after the principal is returned. For a loanthat is repaid in 4-6 months, Rs.10 interest is similar to dedhi whereas Rs.5 interest is similar to sawai .

As against this, loans from formal sector cumulate over time and the absolute difference betweenamount taken and amount repaid can become higher than dedhi / sawai . For instance, at 14 per centcompound interest per annum, non-payment of loan for a little more than 3 years (say, 38 months) will

be higher than dedhi and non-payment for 2 years will be higher than sawai .

A conventional form of giving loan is through mortgaging of land. Creditors now consider it riskybecause fatality like suicides can lead to cancellation of such contracts. They have come up with a newdesign. They insist on sale of land with a verbal (not legal) promise that it will be sold back to the debtorafter the loan is repaid. If required, legal registration expenses on both counts are borne by the debtor.Land seizure/mortgage was mentioned in 17 per cent of a survey conducted in three districts of Vidarbha.

Some of the moneylenders would also be traders. Loan taken could be for purchase of an input andrepayment through sale of produce. This leads to forceful buying of produce when the market rates are

low, delay in payments of produce, etc. In some cases, the agro input providers (Fertilizer shop owners)are moneylenders. They give inputs to the farmers in the form of seeds, fertilizers and pesticides andcharge 3-5% interest per month. This has led to numerous cases where farmers are sold spurious seeds,excess of fertilizers, pesticides, etc. resulting into increased costs and lowering of yields.

Loaning money from relatives is also prevalent and the transaction may or may not involve anassociated interest depending on the verbal agreement between the two parties.


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V.

Analyzing Farmer Suicides

Introduction:According to the National Crime Records Bureau (NCRB) data, during the nine year period from 1997 to2005 nearly 1,50,000 farmers committed suicide all over the country. Of these, nearly 90,000 suicides(60 per cent of the national total) were committed in Maharashtra, Andhra Pradesh, Karnataka andMadhya Pradesh (including Chhattisgarh). These figures also reveal that during the ten year period(1997- 2006), the average number of farmers suicide throughout the country was 15,747 per year duringthe first half (1997-2001) which rose further in the second half (2002-2006) to an average of 17,513 peryear. In other words, during the ten year period from 1997 to 2006, there was 11.2 per cent increase inthe farmers suicide from the first half to the second hal f. To put it differently, during the first half of the said decade, the rate of farmers suicide was a suicide every 33.3 minutes which worsened duringthe second half to a suicide every 30 minutes. The data comparing farmer suicide rates in various statesduring 2001 are given in the table for qualitative comparison.


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Scenario in Maharashtra:The first state where farmer suicides were reported was Maharashtra with particular reference toVidarbha region. Approximately 3.4 million cotton farmers occupy Vidarbha region which includes Akola,Buldana, Washim, Amravati, Nagpur, Chandrapur, Gondia, Bhandara, Yavatmal, Gadhchiroli and Wardhadistricts. While Maharashtra has been unfairly regarded as the worst possible State in respect of farmersuicides (based on Suicide Mortality Rate analysis: states like Kerala, Goa, Karnataka have higher Farmersuicides per 10,000 population), there is no denying that the number of farmers committing suicide andits ratio to the general population has increased to worrisome levels. By end-2007, even afterimplementation of the two Packages for nearly one and half to two years, there was no significantdecline in the absolute number of farmer suicides in Vidarbha, which is a serious cause for concern.

Within the State of Maharashtra, the bulk of the farmers suicides occurred in the Vidarbha region.More precisely, out of the 33 districts of Maharashtra, most of the suicides were in six districts of Western Vidarbha i.e. Amravati, Akola, Yavatmal, Buldhana, Washim and Wardha. Information relatingto farmers suicide in the six suicide -prone districts of Western Vidarbha is presented in the Table below.

There are two sources of these data: the NCRB and the Government of Maharashtra. NCRB providesinformation on suicides by farmers and their family members whereas information provided by theGovernment of Maharashtra relates to investigated cases of farmers suicide.

It can be clearly seen that there are major discrepancies between the information provided by these twosources. Generally up to the year 2005, figures provided by the Government of Maharashtra wereconsiderably lower than the corresponding figures provided by the NCRB.

Socio-Economic Strata of Farmers Committing Suicides:To delve into the possible socio-economic risk factors that can be iden tified with farmers suicides a fieldsurvey was conducted in the districts of Wardha, Washim and Yavatmal. The survey comprehensively


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studied 390 farmer suicide deaths from 2001 to 2004. The following conclusions were drawn about thesocio-economic strata of the farmers who have committed suicide:

In farming families it is mainly the bread-earning men who have committed suicide.

The incidence of suicide is almost negligible amongst the landless labors or marginal farmers.

Almost 75 per cent of farmer suicides have occurred amongst the farmers with land holdingbetween 2 and 12.5 acres.

The incidence of farmers suicide is considerably more among the Other Backward Castes(OBCs); in contrast, the incidence of suicide was minimal amongst the Scheduled Castes (SC) andScheduled Tribes (ST).

Farmers who have committed suicide primarily included those who relied on mono-cropping orthose with little or no irrigation facilities and those who did not have supplementaryoccupations.

Investigating Reasons for Farmer Suicides:Suicides are a complex interplay of multiple factors. They are acts by individuals, but in a social context.As pointed out by Durkheim (2002, first published in French in 1897), suicide could be because of socialisolation/individualism (egoistic) or excess of social integration (altruistic), breakdown of socialregulation (anomic), or excess of social regulation (fatalistic). An individual could face a situation whereshe/he is confronted with a combination of the above possibilities. For instance, changes in policyregime would have an adverse impact on income leading to an economic crisis (anomic), inability to getdaughter married in such situation can also be identified with the strict social norms on age andexpenditure related with marriage (altruistic and perhaps also fatalistic) and such difficulties can lead anindividual to withdraw himself from social activities (egoistic). We will try to analyze the major factors

causing high rates of farmer suicides at both microscopic (individual) and macroscopic (policy) levels.

Microscopic Analysis:For the current study on suicide of farmers, we do not have information on the neurobiologicaldimension. However, for the specific sub-group of population we can identify some socio-economic riskfactors. Different study groups have given a whole range of reasons driving farmers to commit suicide.These reasons in decreasing order or relevance are:

Indebtedness - 93 per cent

Financial Stress - 74 per cent

Family Disputes - 55 per cent Droughts - 41 per cent

Adverse effect on social status - 36 per cent

Problems relating to marriage of - 34 per cent daughters or sisters

Addictions - 28 per cent

Health related problems - 21 per cent


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Clearly most of these reasons are overlapping. As a matter of fact, all these reasons can be classified inone of the three groups:

1.

Indebtedness2.

Family Disputes

3.

Addiction and Health related Problems.

Illustratively, indebtedness and consequent financial distress causing damage to social status in turncreating difficulties in arranging marriage of daughters or sisters are overlapping reasons and as suchcan be classified under a single group of factors: indebtedness. Family disputes constitute the secondgroup, while the third group comprises addiction and health-related problems. Of these three groups,the most dominant one is of course, the indebtedness. In many cases even family disputes or health-related problems emanated from economic distress arising from indebtedness. In other words,indebtedness and its attendant economic distress is the main proximate reason behind the suicides by

farmers.

Macroscopic Analysis:Macroscopic factors may not directly cause farmer suicides, but they do catalyze the process to a greatextent by promoting the microscopic reasons among farmers discussed above. The major macroscopicfactors affecting farmer suicides may be policy related viz. availability of finance, irrigation facilities,regional politics, or social viz. dowry, race for top crop yields, etc. We will try to look into each of thesebriefly.

Non-Availability of Institutional Finance:Financial institutions play a very important role in development of any sector. For several years,however, institutional credit supply to the agricultural sector has not received adequate attention in

many parts of Maharashtra. This has inevitably led to private moneylenders entering the rural areas forfinancing the farmers and in that process exploiting them to a large extent.

While providing credit, banks often place a number of undue restrictions on farmers by introducing rigidcriteria about season, cropping pattern and the scale of finance. It is imperative to bring in someflexibility in this respect. Presently, the scale of finance is apparently fixed at the District level withoutany scientific basis. The scale of finance should be planned and structured at the State level rather thanat the District level.

Government of Indias natio nwide agriculture debt waiver during 2008-09 helped to improve financialconditions of the co-operative banks and credit societies. This has increased the credit supply to farmersto some extent, however, much more is left to be done. Unless institutional finance is made readilyavailable to every farmer without much hassle of complex paperwork, the problem of privatemoneylenders and farmer indebtedness will continue, and so will farmer suicides.

Low Irrigation Penetration:Uncertainty and inadequacy are the fundamental characteristics of the Indian monsoon. Variations inthe monsoon affect the agricultural production. In Maharashtra, Konkan region has the highest rainfallof 2801mm which is followed by Vidarbha with 970mm during the months of June to September


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whereas Central Maharashtra and Marathwada get rainfall of 743mm and 706mm respectively. Theproblem of farmer suicides is found concentrated in the Vidarbha region of the state. Though theaverage rainfall is of the order of second highest in the state, lack of institutional mechanism toconserve the rain water makes region known for water shortage. Hence farmers have to remaindeprived from the benefits of the good rainfall. Conflicts arising from man-made drought are on the rise.

Deforestation does enormous damage. Villagers are increasingly losing control over the common waterresources. A process of privatization of water resources is apparent in most of the real drought areas.There are now two kinds of droughts; the real and the rigged. Both can be underway at the same timeand in the same place.

Since the 1998 the actual rainfall has not been in the appropriate proportion in the region. It either hasbeen in excess or acute. In both the situation farmers have incurred heavy losses by double or triplesowing or sometimes the total crop loss. If proper irrigation facilities are made available and robustmechanisms are established to conserve and distribute water (watershed management), farmers can beinsulated from climactic shocks. Farm productivity would increase leading to increased net profits.

Irrigation would also enable the farmers to take three crops a year thus improving their overall financesand chances of averaging out losses from a particular season.

Although the government has declared subsidies on drip and sprinkler irrigation systems as well aselectric pumps, the paperwork for these take months to complete and the farmer has to pay the entireamount till the procedure is underway. Most of the farmers find it difficult to invest such large amountsfor months at an end. This has lead to less than satisfactory penetration of advanced irrigationtechnologies to the needy farmers.

Regional Politics:Regional politics has played a big role in the lack of development of Vidarbha as against WesternMaharashtra which has a much stronger political clout. There are regional disparities on various frontslike credit availability, irrigation, government scheme implementation, etc. This leads to widening of theexisting developmental chasm between regions of Maharashtra.

IrrigationUntil 1950s, the region of Vidarbha was way ahead of other regions of Maharashtra in terms of irrigationfacilities. During the last 20 years, however, this position has reversed. The irrigation backlog inVidarbha, which was 38 per cent in 1984, shot up to 62 per cent by the year 2002.

Credit

Same is the case with bank credit. In 1995, the institutional credit to agriculture in Vidarbha was 22 percent of total credit to Maharashtra State, which was exactly sam e as the proportion of Vidarbhas population to that of the State of Maharashtra. This situation has however, reversed in the last 10 yearsor so. In the year 2005, the share of Vidarbha to farm credit in Maharashtra was only 13 per cent. Giventhe inadequate irrigation facilities, the cropping pattern in Vidarbha has remained largely unchangedover the years. Mono-cropping rather than crop-diversification has been the trend. In contrast toWestern Maharashtra, the co-operative movement did not take roots in Vidarbha. As a result,


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supplementary occupations did not develop to the extent desired. Moreover, for traditional cotton cropin Vidarbha much larger scale of finance is applicable whereas in Western Maharashtra, crops such assugarcane invite relatively larger scale of finance. Consequently, institutional credit to farming inVidarbha has been of a much lower order than in Western Maharashtra.

Benefits of Loan Waiver The benefits of Govt. of Indias Agricultural debt Waiver in 2008 -09 were reaped by WesternMaharashtra when clearly, the distress in Vidarbha was a major trigger for the waiver in the first place.The following table shows the region wise distribution of benefits:

As seen, the amount payable to farmers was divided between different regions of Maharashtra in aninequitable manner. Illustratively, of the total amount receivable by Maharashtra, 53.8 per centamount is going to be paid to farmers in Western Maharashtra, whereas the share of Vidarbha wasonly 20.1. The amount per account holder thus works out to be Rs.27,310 for Western Maharashtra,

Rs.20,521 for Marathwada, Rs.16,117 for Vidarbha and only Rs.6,903 for Konkan.

Lack of Quality Inputs and Extension Services:The state machinery fails on all accounts when it comes to quality control, distribution and availability of agriculture inputs like seeds, fertilizers and pesticides. Government officers are hand in glove inmalpractices like black marketing of particular variety of seeds, linking of products, artificial scarcity of fertilizers, selling of spurious seeds. In 2012, riots had broken out in Marathwada for a particular varietyof cotton seeds which was being sold at a premium of 100-150%. The movement of fertilizers is trackedonly up to the first point of sale in the district after which there is no transparency about their stocklevels with dealers and retailers. Farmers need to roam tens of shops in search of desired fertilizer/seed

as there is no clarity on the supply.

The agriculture extension departments have failed miserably in taking crop advisory to the grassroots.The farmers are left on their own to take decisions regarding crop selection, seed variety, fertilizermanagement, pest management and other operational techniques. This has been a major reason for lowagricultural yields in Maharashtra and especially in Vidarbha. Crores spent on extension schemes likemobile soil testing vans, study tours, seminars either remain on paper or are targeted at the nichefarmers who dont need it. Politicians guised as farmers, going on study tours abroad , is a common sight.


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In the absence of proper guiding channels, the fertilizer retailer acts as quasi-extension service andguides the farmers which is an obvious conflict of interest. This practice leads to supply-induced-demands and excessive and undue use of fertilizers, pesticides. There have been cases where poorfarmers were guided for re-sowing two to three times even when the weather was adverse. This is oneof the major reasons for increased indebtedness.

Lack of Post Harvest facilities:Vidarbha lags behind in post harvest infrastructure like warehouses, cold storages, etc. This compels thefarmers to sell off their produce as soon as it is harvested at lower rates reducing their profitability.There are limited schemes of loans against warehousing receipts like one provided by the BuldhanaUrban Co-Operative bank, but the interest rates are too high (1.25% per month) to be lucrative to thefarmers.

The number of private markets and industrial buyers in Vidarbha is very less. Thus most of the farmershave to sell their produce at the local APMC. These markets have a chain of middlemen ( Adatiya,Khareedaar, etc.) resulting in the farmer getting a raw deal for his hard earned harvest. Contract farmingand co-operative farming is yet to grow roots in Vidarbha as it has in other regions of the state due toapathy of government machinery and lack of private initiative.

Indirect Causes:

Huge costs involved in social evils like dowries and marriage ceremonies

Lack of health insurance cover and thus financial burden of emergency health care

Inadequate crop insurance and failure to sanction claims leading to instability

Lack of affordable and quality education which will help divert the excess manpower fromagriculture to other sectors

Ever-changing import-export policies of the government regarding international agro trade.


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VI.

Policy SuggestionsPolicy interventions should not be restricted to suicide households. A deeper agrarian crisis can beaverted by policy interventions beneficial in overall terms. It will also help reduce suicides.

Revitalize rural financial market The credit market needs immediate attention; the formal credit structure should be revitalized.

Working Capital This can be for consumption purposes also. It can be operated through Kisan Credit Cards.

Investment Capital Care should be taken not to divert loans given for this purpose. There should be strict supervision byformal institutions to prevent such possibilities. Otherwise, repayment will become difficult.

Public Private PartnershipIndustries should be prompted to create a value-chain in agriculture by involving corporate that willwork with farmers groups or associations from production to marketing stage. This would lead to a win-win situation where the farmers get quality agro inputs and scientific know-how while the industries getquality harvest directly from the farmers eliminating the middlemen. In the long run, the subsidiesgranted to industries could be linked to their success in farmer-support.

Compensating for Regional backlogThe infrastructural backlogs in Vidarbha and Marathwada have been accumulating over years due to thepolitical clout and preferred treatment to Western Maharashtra. This has to be compensated for bysetting up an independent body for development of these regions with a separate budget and

autonomy to work in co-ordination with various departments like banking, irrigation, roads, etc.

Diversification of cropping patternThe important cash crops of Vidarbha are Cotton and Soybean. To reduce the vulnerability, the farmershould have more options and be able to go beyond these crops. Policies that can make diversificationof cropping pattern feasible should be put into place. Inter cropping, fitting two crops, crop rotation andhorticulture should be encouraged. Better water and land management will also help in attaining thisobjective.

Input quality Inputs in the form of seeds, pesticides and fertilizers sold to farmers could be of spurious quality. Thereis no regulatory mechanism. In some cases, farmers are advised by traders to go in for a third sowing acase of supplier-induced-demand. The private traders should be regulated. Local non-governmentalorganizations (NGOs) can be involved in regulating the private trader. Transparency on fertilizermovements and prevalent prices has to be achieved by using technology and media. Along with the


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retailers, the irresponsible officers should be suitably punished to set an example for the rest and curbillegal liaisons.

Coupon-based Grants for Fertilizers and PesticidesThe Government should distribute coupons for the purchase of fertilizers and pesticides to farmers who

are in extremely distressed conditions. The coupon amount should be based on the land holding of thefarmers and also on their cropping pattern. The farmer should be able to buy fertilizers and pesticidesfrom any supplier, as and when required. The supplier should be able to cash these coupons from theappropriate Government agency.

Insurance schemesThe farmers problem is rooted in his exposure to risk yield as well as price shocks. Insurance schemesmay be devised to mitigate these. This can be done in three possible ways. Credit insurance can look intothe credit default. A fund with contribution from the creditor, the debtor and the Government may becreated for this. Appropriate mechanisms to look into its modus operandi should be devised. Cropinsurance will be linked with yield risk. Implementation of this should be village and if possible plot of land specific. Theft of crop and loss due to fire or other calamities should be taken into considerationwhile administering this. The earlier mentioned information bureau could also help in this endeavor.Income insurance will address the poor returns, particularly for marginal and small farmers and alsotenants. The poor returns could be because of poor prices, low yields or high transaction costs arisingout of low quantity of produce.

Water management In the selected districts where agriculture is largely rainfall dependent, strategies to increase irrigationpotential (particularly, through watershed development), should be devised so as to provide scope toincrease value addition. The Maharashtra Employment Guarantee Scheme (MEGS), the National

Watershed Development Project for Rain fed Areas (NWDPRA) and the RIDF can be used for this.Paperwork for subsidies of irrigation and pump sets should be completed in advance within a specifiedtime frame. A coupon could be generated on sanction of the claim, which can then be used for claimingdirect subsidy at the time of purchase. This can alter be integrated in the AADHAR based direct transferof subsidies.

Land management Excessive use of fertilizer and pesticides and mono-cropping can affect the fertility of land. Appropriateland management techniques should be devised. This should complement the efforts in improving watermanagement. The MEGS and RIDF can be used for this.

Revive agricultural extensionIn cotton, there is the emergence of new varieties of seeds that makes conventional methods of cultivation redundant. The experience gained over the years is of no use. There is deskilling. The farmerhas to upgrade his technical know-how. He should also be abreast with the latest developments in waterand land management. An appropriate mechanism to revive agricultural extension is urgently required.Local NGOs can also be involved in facilitating agricultural extension.


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Encourage organic farmingIt will be beneficial on two counts - to reduce costs associated with pesticides and fertilizers and reducethe availability of pesticides for committing suicide. We have also observed its successful practice in twocases during our survey. Replication of such experiments should be encouraged. For instance, shiftingfrom inorganic to organic farming will give low returns in the initial two to three years. This acts as a

deterrent for marginal and small farmers. Compensating them during initial years would help. This canbe done through MEGS. It would be similar to payment of wages to the landowner under horticulturescheme of MEGS. The help provided should also be in terms of technical know-how (agriculturalextension), certification & quality control and marketing. The Vidarbha Organic Farmers Association andother similar organization may be involved in this endeavor.

Increase import tariff The farmer is exposed to price fluctuations, particularly in cotton, because of global price movements. Inthe current scenario low domestic price is largely due to huge subsidy by the United States of America(USA), a major exporter, and low import tariff in India. The Government of India may be requested (1) to

raise the issue of high subsides in the USA at appropriate forums and (2) to increase the import tariff inCotton to 30-35 per cent from the current 5 per cent.

Price stabilizationThe Monopoly Cotton Procurement Scheme of Maharashtra has failed in mitigating price fluctuations.Some of the reasons are because of inappropriate functioning of the scheme like payment of additionaladvance price without looking into market conditions, rent-seeking by office bearers duringgrading/weighing, involvement of middlemen who take a commission from farmers, delay andstaggered nature of payment to farmers and the payment to farmers being linked with loan repaymentamong others. These failures should be looked into and an appropriate mechanism to control price

fluctuation may be considered. It will also help in risk mitigation.

Non-farm employment A large proportion of rural population being dependent on agriculture (cultivators and agriculturallaborers) indicates that there are not many avenues of diversifying sources of income. Agro-basedindustries and other non-farm opportunities should be increased. With the current cropping pattern, theagro-based industries can be cotton or oilseeds based. It can be related to organic farming likemanufacture of composts, bio-fertilizers and bio-pesticides among others.

Public HealthThe primary health centers (PHCs) should have trained staff and be equipped with necessary material to

handle cases of poisoning. This will reduce travel time and save more lives. A complete health check upof the concerned person should be done in the Government hospitals. A specific coupon or identity cardshould be provided to the person for his health-care, within which there should be a provision for thepatient to get cash-less treatment in any Government hospital or in case of an emergency, in any privatehospital.

Community groups


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Develop a protocol for starting survivor support groups. Form community/farmer groups in rural areas.These groups can discuss farm related and other socio-economic problems.

Socio-religious activitiesThe help of socio-religious organization like The Art of Living or Vipassana may be sought to mitigate thegeneral state of despair among people.

Reduce social expenditureOne of the reasons for indebtedness is expenses associated with marriages in the family. A related riskfactor observed is the difficulty in conducting daughter /sisters marriage when faced with an economiccrisis like crop loss. Initiate involvement of civil society to discuss and bring about changes in the societyby curtailing huge expenses on marriages and other social functions.

Social sector needsHealthcare needs and higher educational requirements also lead to credit requirement andindebtedness. Poor infrastructure also adds to transaction costs in terms of storage and marketing. Poortransportation can also lead to delay in seeking healthcare during times of emergency (including theconsumption of pesticides/poison). Appropriate interventions may be designed.

musings on agriculture in maharashtra

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