FOREVER STUCK IN A CYCLE OF DEBT AND DEATH

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By Three farmers drank poison in Burdwan recently. Their deaths were blamed on drought and lack of irrigation. But do dubious credit agencies too have blood on their hands? asks Uddalak Mukherjee
  • Published 7.10.10
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According to the National Crime Records Bureau, since 2003, one Indian farmer has committed suicide every 30 minutes. In 2008, 16,196 farmers took their own lives, bringing the total number of farmer suicides in India between 1997 and 2008 to 199,132. (Significantly, P. Sainath is of the opinion that like all government data, these figures too are unreliable. For when women farmhands kill themselves, their deaths are not enlisted as farmer suicide.) In its next survey, the NCRB will perhaps add Jitu Bagdi’s name to this burgeoning list. Bagdi is one of the three farmers — Yunus Sheikh and Gosai Das Patra being the two others — who have killed themselves in Ausgram in Burdwan district, which is also known as Bengal’s granary. Jitu’s widow, Rupa, whom I met recently, described her husband as quiet and honest. Munmun, his slip of a daughter, told me how, on returning from school, she had found her father writhing on the mud floor, frothing from the mouth. Barely conscious, he had asked Munmun not to raise the alarm, and instructed her that she and her brother should eat what their mother could provide after he died.

Jitu’s death led to the unfolding of a familiar chain of events. Initial media reports were ignored by both the CPI(M)-led panchayat and the bureaucracy. But after senior leaders from the Trinamul Congress and the INTUC visited the family, the local administration swung into action. Rupa received a loan of Rs 20,000, at a negligible interest rate, and the panchayat was also asked to ensure that she be provided work under the Mahatma Gandhi National Rural Employment Guarantee Act. Incidentally, Rupa informed me that work under the MGNREGA was irregular in Ausgram. Official figures confirm the truth of her statement. In 2006, West Bengal could only provide 17 days of work to its people and it is unlikely that the figure has been improved upon significantly.

The renewed interest in Jitu’s death after the visit of the Opposition leaders led to the discovery of other unsettling facts. Farmers in Burdwan, one of the 11 districts that have been declared drought-affected by the state government, have been inconvenienced further by the near-absence of irrigation facilities. One other factor, crucial to each of the three deaths in my view, was, however, underreported: the role that moneylenders and other dubious credit institutions play in farmer suicides. Rupa, who is ineligible for compensation under the widow pension scheme because she is under 40, had mentioned that after his crops failed, Jitu, a sharecropper, had been worried about repaying the sum — Rs 32,000 at a monthly interest of 10 per cent — that he had borrowed in the last two years. Creditors came calling often, and Jitu had been troubled by the thought of his family’s honour being sullied.

It is never easy to take one’s own life. But as Rita talked in a hushed tone, her downcast eyes devoid of all expression, even grief, I did not find it difficult to understand what must have driven Jitu towards death. It wasn’t merely the sight of dried-up saplings in the field. His death was brought about by the moneylenders’ taunts and the knowledge that he could not fight, let alone win, against the odds that confront many of India’s small and marginal farmers. Yet another man who made an honourable living by feeding the nation had been reduced to a pauper. But despite his penury, he, like the others who have died before him, had not given up on his pride and integrity.

In its report to the agriculture ministry, the U.C. Sarangi committee, which was constituted to examine ways to reduce the dependence of India’s agricultural tenants and sharecroppers on informal sources of credit, has stated that only one among seven of India’s marginal farmers has access to institutional credit. The share of non-institutional credit in farm loans, the committee says, has risen from 30.6 per cent in1991 to 38.6 per cent in 2002. Conversely, the share of loans given by moneylenders has also jumped from 17.5 per cent to 26.8 per cent. More worryingly, the committee found that existing mechanisms to identify the sources of informal credit are inadequate, something that has helped exploitative, non-formal credit institutions to escape scrutiny.

In Ausgram, I got an inkling of their shadowy presence. Although none of the villagers I spoke to was willing to tell me the names of local moneylenders (they feared both political reprisal and the loss of access to loans), I was tutored on some of the forms of informal farm credit. Under the bari system, for instance, a farmer is charged 20 kilogrammes of his produce over every 50 kgs he borrows. Again, aropdars — businessmen who buy agricultural produce, mainly rice in this case, and sell it to mill-owners — dole out loans at an interest rate that may be as high as 42 per cent. Then there are the local shopowners — the owner of a famous emporium near Guskara being one such— who give loans in return of mortgages in gold.

The proliferation of such informal credit delivery systems can be attributed to the failure of institutional credit agencies such as cooperatives and banks. The Sarangi committee report mentions that in 1991-92, cooperatives accounted for over half of “all agricultural credit disbursement”. By 2008-09, the figure stood at 13 per cent. I did not have to wait too long to find out what ails rural cooperative societies. A member of the Ausgram Cooperative Society — regulated by the Burdwan Central Cooperative Bank — provided some of the answers. Given the low literacy rate, most farmers find the rules concerning credit disbursal complicated. Apparently, credit disbursal in cooperatives follows a three-tier route. Funds released by the Reserve Bank are first sourced to the West Bengal State Cooperative Bank, which, in turn, disburses the amount to BCCB. This procedure consumes time, and raises interest rates. Moreover, there is the threat of bad debt. Cooperative employees are not well-paid and their lack of motivation cripples both distribution and recovery of loans.

There were other facts that the official suppressed. But they were corroborated by some of the local farmers who have been denied loans by the cooperative. Much like every form of institutional welfare in West Bengal, farm loans are also distributed along political lines. According to the Ausgram Cooperative Society’s own estimates — mentioned in a pamphlet that carried the minutes of the annual general meeting of the cooperative that took place on September 5 at the local high school — only 193 farmers had been given loans out of a total of 1,601 members. It is alleged that the recipients were supporters of the ruling party. The document also mentions that the cooperative had been unable to distribute urea to farmers because of erratic supply. But here too, local farmers alleged that the crisis was largely a result of urea meant for the cooperative being sold in the black market.

Commercial banks, another important source of institutional credit, are also plagued by their own limitations. The manager of Burdwan’s Allahabad Bank identified the lack of manpower and inadequate infrastructure as the main reasons for this lacuna.

The vacuum created by the absence, and inherent weaknesses, of cooperatives and commercial banks has been filled by newer models of credit delivery that are equally flawed: micro-finance institutions. Interestingly, according to law, banks are under compulsion to lend money to MFIs at 11 per cent. The MFIs, touted as the pioneers of the microcredit revolution, loan funds at rates as high as 24-36 per cent, leading to the creation of yet another kind of debt trap. Unconfirmed reports state that 60-odd farmers in Andhra Pradesh’s Guntur, East Godavari, Krishna and Prakasam districts committed suicide after they failed to repay loans from MFIs whose methods of loan recovery were as unethical. A nation yet to recover from the shock of Vidarbha may soon have to brace up for another, slightly newer, reason behind such deaths.

Andhra Pradesh’s experience in micro-credit is perhaps instructive for other states, including West Bengal, that are keen to replicate it. Undoubtedly, loans doled out by MFIs improve cash flow in agrarian communities. But the onus isn’t on creating sizeable savings. In Andhra Pradesh, according to 2006 estimates, each member of a self-help group managed to save only Rs 377. Significantly, women — a sizeable number are part of Andhra Pradesh’s micro credit movement — feature significantly in the debt traps created by MFIs. Despite allegations of inflated interest rates, and that MFIs are instrumental in corroding community ties and in threatening the economic security of farmers, corporate interest in and support of microcredit have led to unquestioned State patronage. Only recently have things begun to change, an indicator that something may have indeed gone drastically wrong. It is to be noted that the Sarangi committee has suggested that moneylending laws be amended to include “for-profit MFIs”, and that priority sector benefits be denied to MFIs that have a dubious record in loan disbursal. Reportedly, in a recent circular, the government has directed banks to blacklist at least 350 MFIs.

But faulty economic practices and the vagaries of the environment are not the only causes of farmer suicides. The State cannot shirk its role in the deaths of 199,132 Indian farmers because the institutional weaknesses reflect a larger failure that is also political. Since the early years of liberalization, the average household debt of Indian farmers has risen from 26 per cent to 48.6 per cent. In 14 years, between 1991 and 2005, their per capita net food availability fell from 510 grams to 422 grams. National Sample Survey data in 2006 also revealed that 63 per cent of rural households contributed to India’s sizeable outstanding debt. These figures are not very recent, and they are unlikely to dip in the future. Add to these facts other unpalatable truths such as the government’s own dilemma on how to balance industry and agriculture, the threat of the market, weak distribution and storage facilities, inadequate insurance, falling prices and soil infertility, and we begin to understand the debilitating conditions that snuff out lives like Jitu’s. The Gandhian vision of an equitable and sustainable agrarian society has been scoffed at for being untenable. But has the Indian State accorded the right priority to agriculture?

As I travelled and talked with the people in Ausgram, I was gripped by a strange feeling. The faces were different, as was the landscape, but the stories I heard and jotted down, the issues that the people discussed angrily, the promises that had been made by leaders across party lines — everything reminded me of what I had seen in Vidarbha. The links that bind Burdwan to Vidarbha, I realized, are not that tenuous.

Discovering these links, analysing and commenting upon them are the media’s responsibility. But the exchange is seldom uncomplicated. Every journalistic visit and investigation lead to the discovery of new facts, and, at the same time, obfuscates older, equally relevant, information. Four potato farmers in Burdwan’s Memari and Jamalpur had committed suicide a few years back. How are their families surviving? Were the assurances made by the State, if any, fulfilled? Were those deaths caused by conditions that are as debilitating as the ones I saw in Ausgram? And, in the larger context, what explains the media’s reluctance to report on the flip-side of MFIs?

The truth is that for the media, as for every other institution, Jitu Bagdi is important only in death. While he lived, and fought each day to survive, we simply watched and waited, secure in our indifference.