[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

MORE MARKETS, LESS GOVERNMENT
and 33,174 crore by December 2006
(GOI, 2007:171). Credit volume extended
by commercial banks and regional
rural banks were even higher than cooperatives
although initials were the same.
Their initial credit amount was to the
tune of Rs.24.23 crore in 1950-51, which
further got increased to Rs.36,860 crore
in 1998-99 and in December 2006, it
stands at 1, 16, 169 crores. Provisional
estimates, projection and targets indicated
increasing volume of credit. The
share of agriculture in total bank credit
had steadily increased under the impulse
of bank nationalization and reached 18
percent towards the end of
the 1980s. But thereafter,
agriculture suffered severe
neglect of institutional
credit delivery mechanism
in the post reform period.
The achievement has been
almost completely reversed
and the agricultural credit share dipped
to less than 10 percent in the late 90s – a
ratio that had prevailed in the early
1970s. Even the number of farm loan accounts
with scheduled commercial banks
has declined in absolute terms from
27.74 million in March 1992 to 20.84 million
in March 2003 (Shetty, Economic
and Political Weekly, July 17, 2004).
Similarly per hectare credit in rupees to
agriculture in recent years increased
from 1,940 in 1998-99 to 4,578 in 2003-
04, but annual growth rate of per hectare
credit to agriculture, which was 25.5
percent in 1999-00 over previous year,
slipped down to 14.2 percent in the year
2000-01. After witnessing partially recovery
(17.4 percent) in 2001-02, growth
of per hectare credit registered lower
rate ( at 14.1 percent) in 2002-03 (Lok
Sabha.2005). This also partially explains
as to why moneylenders were dominating
the credit market, wherein appropriating
surpluses through exorbitant interest
rates (Bhalla, 2005:6).
3. Farmers In Despair
Vagaries of monsoon added with rising
costs and uncertainty of access to reliable
technology, market and public credit
institutions amidst unprotected risks
with non-profitable agriculture aggravated
the syndrome of frustration among
farmers across the states of India irrespective
of level of development of agriculture.
Initially anticipating
better returns farmers invested
capital mobilising
through public and private
institutions and stayed in
production for couple of
years to make their fortunes.
Richer lots of farmers could stay
for couple of years because of their staying
power and relatively better access to
credit and inputs even if they suffered
losses. Unfortunately many of them specially
farmers from smaller farm size
could not sustain growing burden of
loans from moneylenders, traders, dealers
of inputs for many years. Because of
loss of face before the community consequent
upon mounting burden of debts,
failures of credit, insurance and procurement
delivery mechanisms and agencies,
they were forced to commit suicides.
Various studies and reports have been
conducted on this serious problem. Indira
Gandhi Institute Of Development
Research (IGIDR) has brought a comprehensive
study on suicides of farmers
(Mishra 2006:41) for the government of
Maharashtra. Study found various reasons
for suicides. About 86.5 percent
suicides were because of indebtedness,
73.9 percent for deteriorating economic
status, and 40.5 percent because of crop
failures. Loss of face in community (because
of non-payment of loan, inability
to marry their marriageable sisters and
daughters, etc.), were the other reasons.
About 91 percent of suicides were committed
by males. As per police records,
number of suicides in Maharashtra in
2004 alone was 4147. Study reported that
number of suicides increased from 11866
to 14729 between 1995 to 2004.Study
suggests that suicides in females registered
decline after 1999. Another study
The central issue of farmers’ suicides is the debt trap.
Small and marginal farmers are not eligible for availing
institutional credit and crop insurance. Thus, they land at
the doorsteps of the usurious moneylenders
(Mohanty, 2005) revealed that cash crop
growers, small and marginal farmers of
Amaravati and Yavatmal districts were
trapped in debt anticipating better returns
from cultivation and committed
suicides.
Kisan Sabha estimates that more than
5,000 farmers committed suicide in
Andhra Pradesh since 1998, more than
3000 committed suicide in Maharashtra,
about 1,000 farmers committed suicide
in Punjab from 1998 to the present, and
about 5,000 committed suicide in Karnataka
over the same period. It is estimated
that 488 farmers committed sui-
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