Saturday, November 23, 2013

India's Agrarian Crisis: A Farmer Commits Suicide Every 30 Minutes

An Indian farmer commits suicide every 30 minutes. About 200,000 Indian farmers have killed themselves over the last decade, according to media reports quoting India Rural Development Report 2012-13 released in September this year.

The report, prepared by a government-funded Infrastructure Development Finance Company, was released by India's rural development minister Jairam Ramesh. It says 65% of India’s poor live in Uttar Pradesh, Bihar, Assam, Jharkhand, Odisha, Chhattisgarh and Madhya Pradesh in 2011-12, a significant increase from 50% in 1993-94.

More recent news indicates that the crisis is continuing unabated. About two-thirds of the farmer suicides are being reported from 5 states: Maharashtra, Andhra Pradesh, Karnataka, Madhya Pradesh and Chhattisgarh. Other states are not immune. Indian Punjab has seen nearly 7000 farmers kill themselves in the last decade. Gujarat, the home of BJP's Prime Ministerial candidate Narendra Modi, reported 60 farmer suicides in 2012-13.

A report by Center for Human Rights and Global Justice blames failures of biotech crops, particularly Bt cotton, for the tragedy. The report also says inadequate policy responses are contributing to the crisis. Others believe it is caused by poor irrigation. They say that cotton requires a lot more water relative to other crops. It takes 25,000 liters of water to produce one kilo of cotton, about 50 times more than to grow a kilo of potatoes, according to a report in Forbes magazine.

The problem of suicides appears to be at least in part due to the fact that India's value added agriculture continues be among the lowest in the world. Unlike India, Pakistan managed to significantly raise agriculture productivity and rural incomes in 1980s through a livestock revolution. Economic activity in dairy, meat and poultry sectors now accounts for just over 50% of the nation's total agricultural output. The result is that per capita value added to agriculture in Pakistan is almost twice as much as that in Bangladesh and India.

Adding value is the process of changing or transforming a product from its original state to a more valuable state, according to Professor Mike Boland of Kansas State University. The professor explains how it applies to agriculture as follows:

"Many raw commodities have intrinsic value in their original state. For example, field corn grown, harvested and stored on a farm and then fed to livestock on that farm has value. In fact, value usually is added by feeding it to an animal, which transforms the corn into animal protein or meat. The value of a changed product is added value, such as processing wheat into flour. It is important to identify the value-added activities that will support the necessary investment in research, processing and marketing. The application of biotechnology, the engineering of food from raw products to the consumers and the restructuring of the distribution system to and from the producer all provide opportunities for adding value."

Although Pakistan's value added to agriculture is high for its region, it has been essentially flat since mid-1990s. It also lags significantly behind developing countries in other parts of the world. For example, per capita worker productivity in North Africa and the Middle East is more than twice that of Pakistan while in Latin America it is more than three times higher.

Agriculture Value Added Per Capita in Constant 2000 US$--Source: World Bank
There are lots of opportunities for Pakistan to reach the levels of value addition already achieved in Middle East, North Africa and Latin America.These range from building infrastructure to reduce losses to fuller utilization of animals and crops for producing valuable products.  Value addition through infrastructure development includes storage and transportation facilities for crops, dairy and meat to cut spoilage. Other opportunities to add value include better processing of  sugarcane waste, rice bran, animal hides and bones, hot treatment, grading and packaging of fruits, vegetables and fish, etc.

Agriculture Value Added Per Capita in South Asia, North Africa and Latin America--Source: World Bank
Pakistan's growing middle class has increased demand for dairy, meat and various branded and processed food products. Engro, Nestle, Unilever and other food giants are working with family farms and supermarket chains like Makro, Hyperstar and Metro Cash and Carry to respond to it by setting up modern supply chains.

Growth of value added agriculture in Pakistan has helped the nation's rural economy. It has raised incomes and reduced rural poverty by creating more higher wage jobs. It has had a salutary effect on the lives of the rural poor in terms of their ability to afford better healthcare, nutrition and education. Doing more to promote value added agriculture can accelerate such improvements for the majority of Indians and Pakistanis who engage in agriculture and textiles and still live in rural areas.

Here's a Democracy Now video on Indian farmers' suicides:

Related Links:

Haq's Musings

Most Indians and Pakistanis Employed in Agriculture and Textiles

Pakistan Leads South Asia in Value Added Agriculture

Pakistan Among Top Meat and Dairy Consuming Nations

Upwardly Mobile Pakistan

Comparing Pakistan and Bangladesh

FMCG Boom in Pakistan

Agricultural Growth in India, Pakistan and Bangladesh

Pakistan's Rural Economic Survey

Pakistan's KSE Outperforms BRIC Exchanges in 2010

High Cost of Failure to Aid Flood Victims

Karachi Tops Mumbai in Stock Performance

India and Pakistan Contrasted in 2010

Pakistan's Decade 1999-2009

Musharraf's Economic Legacy

World Bank Report on Rural Poverty in Pakistan

USAID Report on Pakistan Food & Agriculture

Copper, Gold Deposits Worth $500 Billion at Reko Diq, Pakistan

China's Trade and Investment in South Asia

India's Twin Deficits

Pakistan's Economy 2008-2010


Hopewins said...

^^RH: "The problem of suicides appears to be at least in part due to the fact that India's value added agriculture continues be among the lowest in the world."

It this statement is true, then, according to the graphs you have shown, Bangladesh must also be facing this problem of 'farmer suicides'.

Can you confirm?

Hopewins said...

Every 1/2 hour.....

A) In India:
1,150 people are born
550 people die
(Presumably, ONE of these was a farmer committing suicide)

Therefore, their population is increasing by 1,200 people each and every hour. If that farmer had not committed suicide, it would have increased by 1,201 each and every hour.

B) In Pakistan:
375 people are born
125 people die
(How many of these are poverty-related suicides?)

Therefore, our population is increasing by 500 people each and every hour.

Riaz Haq said...

HWJ: "It this statement is true, then, according to the graphs you have shown, Bangladesh must also be facing this problem of 'farmer suicides'. Can you confirm?"

No, Bangladesh is not because it has a lot more rain water to grow its rice than Indian farmers do to grow cotton, the wrong crop in drought stricken non-irrigated areas.

In fact the entire country of Bangladesh is one large river delta which makes it prone to periodic flooding.

However, Bangladesh rural poverty levels are very high similar to Indian rural poverty levels.

Riaz Haq said...

HWJ: "Therefore, their population is increasing by 1,200 people each and every hour. If that farmer had not committed suicide, it would have increased by 1,201 each and every hour."

It's ludicrous to compare productive farmers suicides with people dying for other causes, including natural deaths.

In fact, WHO data shows that India's premature death rates are among the highest in the world while those in Pakistan lie somewhere in the middle in spite of recent violence.

Anonymous said...

Please see this link about pakistan's future by Finance Minister.

Imran said...

It's very common. Indian Punjab is the bread basket of the country contributing more then any other region. This is why many Sikh;s want independence, they realise how the Indian union is holding them back. As for other parts of the country where suicides are common I am afraid there is no solution for them for the time being.

Riaz Haq said...

Here's a recent story about India's declining farmer population:

Drought, urbanization, suicides and other factors are contributing to India’s dwindling population of farmers – once regarded as the very heart and soul of India’s society and economy.

According to census data from the Indian government, the number of farmers in the country plunged by 9 million since 2001.

"Cultivators," as the Indian government describes farmers, now total some 119 million, making them the second-largest group in the workforce in absolute numbers, but representing just below 25 percent of the total number of workers, down from about one-third in 2001.

While the number of “cultivators” has been decreasing, there are actually now more agricultural laborers (that is, people who work on farms but do not own the land) – numbering some 144 million, or 30 percent of the total workforce, up from 26.5 percent in 2001.

"The rise in agricultural labor could be explained by the falling size of land-holdings over time," Census Commissioner C. Chandramouli said, according to The Times of India.

P. Sainath, an expert on Indian rural affairs, suggests that the decline in Indian farmers is a national tragedy.

Writing in The Hindu newspaper, Sainath notes that India is losing more than 2,000 farmers every single day and that since 1991, the overall number of farmers has dropped by 15 million.

Part of this reduction in the number of farmers has to do with an epidemic of suicides by rural cultivators trapped in enormous amounts of debt.

"We have been undergoing the largest catastrophe of our independent history — the suicides of nearly a quarter of a million farmers since 1995,” Sainath said at a lecture at the Institute of Development Studies in Kolkata.

“We are talking of the largest recorded rate of suicides in human history.”

The India Tribune estimated that an Indian farmer kills himself every 12 hours. According to the National Crime Records Bureau (NCRB), between 1995 and 2009, more than a quarter-million farmers committed suicide.

In 2009 alone, more than 17,000 farmers committed suicide just in the state of Uttar Pradesh.

Some experts believe the actual number of farmer suicides is much higher than official data indicates.

“The official statistics in India rely on the National Crime Records Bureau -- basically what are police reports of suicide," said Professor Prabhat Jha of the Center for Global Health Research in Toronto, according to BBC.
“Even now, 60 years after the British left, 70 percent of India’s farmland depends on the monsoon,” Das said.

“That means if the monsoon fails and rains fail, there is drought and the government has not invested enough in water irrigation facilities.”

Further, Professor Jha points out that the practice of suicide is spreading across the breadth of Indian society, particularly among the young.

“While suicide in farmers is certainly an important [phenomenon], if we’re concerned about suicide we need to look at the bigger picture,” he said, according to the Post.

“The main story of suicide in India is not of farmers, it is of young people, between the ages of 15 to 29, who are taking their lives. So the dominant headline I think really is, why are so many young Indians killing themselves?”

Indeed, Jha noted that the rate of suicide among Indian agricultural workers and farmers amounts to about 7 deaths per 100,000 people, while the overall suicide rate in India is more than double that amount.

Riaz Haq said...

Here's hedge fund manager Jim Rigers on India as reported by LiveMint:

Singapore: Hedge fund manager Jim Rogers has always been an India bear and a critic of the policies of the Indian government. The chairman of Rogers Holding who moved to Singapore in 2007 because he believes the centre of the world is moving to Asia, lashes out in an interview at both national political parties and dismisses Goldman Sachs’ recent report on how it was turning bullish on India because of the possibility that the Bharatiya Janata Party’s (BJP’s) Narendra Modi could be the country’s next prime minister. “I won’t invest in India” till the country opens up more, said Rogers. Edited extracts:
What do you think of the whole controversy regarding the Goldman Sachs report titled “Modi-fying our view: raise India to Marketweight”. Do you agree with what the brokerage firm said on change?
Firstly, India has been badly managed for the past 60 years. I am not talking about just the two main parties in India—get rid of all the politicians. Who knows as to who is the worse between the ruling party and the opposition. Both Congress and BJP have not been and will not be good for India, until they completely open its economy and catch on to how the world really works. India will continue to suffer—I am not saying that the opposition will be better. Everybody who has had anything to do with running India in the past so many years have failed India.
Now, it is a different issue if Goldman Sachs be allowed to comment. If they can’t comment, then can newspapers from outside (India) be allowed to comment? What Indian politicians are saying if you criticize is that you can’t comment if you are an outsider. That is one of the problems for India, and this is why India has been a disaster for so long. It keeps fouling up—telling anybody they cannot criticize or comment is a terrible, terrible mistake for India. Does that mean only Indian media can comment on what is happening there? Are politicians trying to say you can’t comment unless you agree with what they say? I find India’s reaction to the Goldman Sachs report ludicrous. I’m no fan of Goldman Sachs, but India’s reaction to the report is embarrassing. Indians should be embarrassed to have politicians who react like that to a report.
Has the BJP said or done anything revolutionary, or said anything different? They say we like business people better than Congress, but can they do anything other than making some cosmetic changes? Yes, if they (BJP) win, Goldman Sachs will be happy; they can buy stocks and markets will go up. But a year later everyone will look around and say that nothing has changed. It will still be impossible to do business in India unless you are in bed with politicians and bureaucrats. It will still be impossible for people to buy and sell currencies the way they want to…. I can buy gold nearly anywhere in the world, but not in India because I am foreigner. What kind of garbage is that?...

Riaz Haq said...

Here's a Forbes piece on Goldman Sachs's report on "Modi-fying India":

Global investment firm Goldman Sachs probably didn’t think it would be accused of meddling in India’s domestic politics when it upgraded its view on India. But with national elections due within a few months, it made the mistake of attributing some of its positive sentiment to the leading opposition party candidate.

In its latest report on India earlier this week, Goldman Sachs said it was “Modi-fying our view: raise India to market weight.”

The ‘Modi-fying” was a clear play on the name of Narendra Modi, the prime ministerial candidate of the Bharatiya Janata Party, the main opposition party to the ruling Congress Party-led United Progressive Alliance.

The report said:

“Equity investors tend to view the BJP as business-friendly, and the BJP’s prime ministerial candidate Narendra Modi (the current chief minister of Gujarat) as an agent of change. Current polls show Mr. Modi and the BJP as faring well in the five upcoming state elections, which are considered lead indicators for the general election next year.”

A smarter thing for Minister Sharma would’ve been to cite the rest of the reasons that Goldman Sachs listed in its report for raising its investment case on India–a variety of measures taken by the current government and India’s central bank in the past few months and that are finally beginning to bear fruit, making India a better investment case.

Specifically, the report says:

BJP and Mr. Modi, in particular, have been focussed on infrastructure and capital spending in the past and a BJP-led government may be beneficial for the investment demand pick up, in our view.
the central bank (RBI) has taken various measures to relieve immediate pressure on the current account and encouraged capital flows which have helped arrest [rupee] weakness
Some of the key data points and lead indicators related to investment demand have started to show signs of pick up. The decline in new project starts in industrial and infrastructure projects seem to have halted in 2QFY14, although project starts still remain at low levels. We are also seeing early signs that fewer new projects have stalled – an indication that we may be close to a trough in the investment cycle given recent policy initiatives from the government and new approvals coming through in power and road projects.
Over the last month, earnings sentiment has improved significantly… with early signs of pick up in investment demand.
Foreign inflows into Indian equities have remained strong this year despite the excessive volatility and sell-off in emerging markets…. While FII flows have been strong and “sticky”, which has been supportive of the rally in equities, domestic institutions have been net sellers of equities…. If the recent rally and optimism regarding leadership change stem the redemption flow, the equity demand/supply balance could shift more favorably.
As elections loom closer and turnouts at Modi’s rallies easily outstripping those at Congress rallies, was Minister Sharma’s outburst a sign of panic? He would’ve better served his party by just holding up the report and taking some credit.

Gp65 said...

Reducing number of Indian farmers does not present a problem as long as agri production is not reducing. It is in fact desirable that people move from being small time cultivators to working in industry.

What you refer to as positive I.e. so called value addition in form of greater animal husbandry has a different way of being looked at also. As mentioned by. Vinod Khosla, meat production requires he most amount of land and a disproportionate amount of other resources. 1 kg of red meat requires 7.6 kilos of grains and more than 6800 litres of waters as well as 4.4 mega jokes of energy to produce.

If you think that Pakistan's 'leadership in this area in a region that is water stressed, energy starved and has many food insecure people is something to boast about - fine. Clearly there are other viewpoints that differ from yours.
having said that, the problem of farmer suicide is a real problem and it arises due to agricultural indebtedness. India policymakers are working on addressing the issue and the there is a significant downward trend.

Simply because Pakistan does not measure such things and in fact has not even had a census since 1998 does not mean Pakistan does not have problem with suicides.

Until recently you used to make a big deal about open defecation in India which is widely reported within India and has attention of policymakers, turns out Pakistan also has a serious problem - simply that it is not widely reported and does not have the attention of policymakers,

Riaz Haq said...

GP65: "Reducing number of Indian farmers does not present a problem as long as agri production is not reducing."

This statement would only make sense if there was significant rise in ag productivity which is not the case in India.

GP65: "Vinod Khosla, meat production requires he most amount of land and a disproportionate amount of other resources"

That's the usual vegetarian argument. What it ignores is the fact that livestock economy is a lot more than meat production. It also includes dairy and poultry which are very important sources of protein for humans.

GP65: "Simply because Pakistan does not measure such things and in fact has not even had a census since 1998 does not mean Pakistan does not have problem with suicides."

All anecdotal evidence and data from independent sources shows Pakistan has very low rates of suicide. When suicides do occur, Pakistani media covers them extensively.

Pakistan's overall pre-mature death rate is much lower than India's, according to WHO data.

GP65: " Until recently you used to make a big deal about open defecation in India which is widely reported within India and has attention of policymakers, turns out Pakistan also has a serious problem - simply that it is not widely reported and does not have the attention of policymakers"

Such data is widely available and reported ad it shows Pakistan's open defecation problem is not nearly as big as India's. And the reason for it is the success of CLTS (community-led total sanitation) campaign in Pakistan.

Anonymous said...

And yet,in 1947, when it achieved independence, India was one of the more successful countries in the world, a democratic country. But despite democracy, or maybe because of it, India has never lived up to its potential. China was a shambles as recently as 1980. India was far ahead of it. Bt since then China has left India, literally in the dust....As China rises, India continues to decline relatively. Its dent-to-GDP ratio is now 90 percent, making a strong growth rate virtually impossibl

Jim Rogers is a tax dodging idiot symptomatic of the breed of over confident idiots who wrecked the world economy in 2008.

'India one of the most successful countries in the world in 1947??'

Are f**king kidding me?

No food self industrial base civil war raging.literacy of around 10%..

Though dwarfed by China India is a far better place now than in 1947 and should kicking and screaming become a second world country(per capita usd 10K(nominal),full literacy,70% urbanized) in the 2025-30 time frame. The population size will inevitably lead to economic superpowerhood...behind the US and China but far larger than any other country.

'China was a shambles as recently as 1980.

Again incorrect China overtook India in ALL major HDI indicators literacy,access to basic health care ,military might in this 1947-80 period obviously they did somethng right?The social capital that led to the growth of the next 30 years and still continuing was done in this period.

Riaz Haq said...

HUMANDEVELOPMENTINDEX. Pak better than India on poverty. WORRISOME India ranks lower than Pak on gender equality too. Chetan Chauhan.

Anonymous said...

Latha Reddy Musukula was making tea on a recent morning when she spotted the money lenders walking down the dirt path toward her house. They came in a phalanx of 15 men, by her estimate. She knew their faces, because they had walked down the path before.

After each visit, her husband, a farmer named Veera Reddy, sank deeper into silence, frozen by some terror he would not explain. Three times he cut his wrists. He tied a noose to a tree, relenting when the family surrounded him, weeping. In the end he waited until Ms. Musukula stepped out, and then he hanged himself from a pipe supporting their roof, leaving a careful list of each debt he owed to each money lender. She learned the full sum then: 400,000 rupees, or $6,430.

A current of dread runs through this farmland, where women in jewel-colored saris bend their backs over watery terraces of rice. In Andhra Pradesh, the southern state where Ms. Musukula lives, the suicide rate among farmers is nearly three times the national average; since 1995, the number of suicides by India’s farmers has passed 290,000, according to the national crime records bureau, though the statistics do not specify the reason for the act.

India’s small farmers, once the country’s economic backbone and most reliable vote bank, are increasingly being left behind. With global competition and rising costs cutting into their lean profits, their ranks are dwindling, as is their contribution to the gross domestic product. If rural voters once made their plight into front-page news around election time, this year the large parties are jockeying for the votes of the urban middle class, and the farmers’ voices are all but silent.

Even death is a stopgap solution, when farmers like Mr. Reddy take their own lives, their debts pass from husband to widow, from father to children. Ms. Musukula is now trying to scrape a living from the four acres that defeated her husband. Around her she sees a country transformed by economic growth, full of opportunities to break out of poverty, if only her son or daughter could grasp one.

But the trap that closed on her husband is tightening around her. Like nearly every one of her neighbors, she is locked into a bond with village money lenders — an intimate bond, and sometimes a menacing one. No sooner did they cut her husband’s body down than one of them was in her house, threatening to block the cremation unless she paid.

Her appeals to officials for help have been met with indifference. Lately, her fear has been getting the better of her.

Riaz Haq said...

Five farmers took their lives in Maharashtra in the three days to Monday.

The wave of farmer suicides in the rain-shadow regions of Marathwada and Vidarbha continues unabated despite the new Bharatiya Janata Party government announcing relief measures to combat the agricultural crisis affecting more than 19,000 villages in the State.

Three consecutive years of drought and unseasonable rain have broken the spirit of farmers.

Reports say changing weather patterns, mounting indebtedness and poor crop yield are driving farmers to suicide.

Tulsidas Madalwad, a minor farmer, electrocuted himself at Kakandi village in Nanded district unable to pay off the debts accumulated over multiple bad harvests on his two-acre farm. “He returned from his field and electrocuted himself by stringing wires to his feet around 10 a.m. When his wife and little daughter came with food, they found him charred to death,” a villager said.

Madalwad was devastated by the destruction of his soya bean crop and was worried about repaying more than Rs. 1 lakh to banks and local moneylenders, the people said.

In the neighbouring Latur district, Sangram Bemde, 46, another marginal farmer, immolated himself on Monday after his cotton crop failed for the third consecutive year, traumatising his family and relatives.

Kashiram Indore, 76, built a pyre and jumped into it on Friday following the poor soya bean yield from his one-acre farm at Manarkhed in Akola. Indore was despondent as just a quintal and a half of soya bean could be harvested this year.

The Javadekar family of Javda in Buldhana is facing the grimmest winter after their only son, Shivshankar, 24, hanged himself on Saturday evening as he could not repay the Rs. 60,000 loan his family took after their two-acre farm faced consecutive years of drought.

Family members said Shivshankar was aspiring to pursue higher education. Another farmer too committed suicide in the district.

Riaz Haq said...

Nestle Pakistan Ltd., a unit of the world’s biggest food company, has started selling pasteurized fresh milk in a pilot project as it seeks to develop a new segment in the South Asian country’s $23 billion dairy market.
The company has been delivering plastic pouches of milk to 100 homes in Lahore for the past three months on motorbikes and three-wheeler taxis.
“It’s like when we started with our water gallons 20 years ago, which started with delivery to offices and households, it starts small and then spreads,” Nestle Pakistan Chief Executive Officer Magdi Batato, 56, said in an interview at the company’s headquarters in Lahore. “There is a potential, but it’s still niche in my view.”
Nestle wants to diversify in the world’s fifth-largest milk market, where 95 percent of dairy products sold are unprocessed with people buying the liquid raw and then boiling it. Companies already sell milk in ultra-high temperature form that has a longer shelf amid long hours of energy outages in the blackout-prone nation.
Pakistan’s dairy industry has a value of about 2.3 trillion rupees ($23 billion) a year, according to Zoya Ahmed Zaidi, an analyst at AKD Securities in Karachi. She projects the sector will increase in value by about 10 percent over the next five years.
‘Right Direction’
Engro Foods Ltd., a Pakistani dairy and juice company, discontinued branded shop sales of fresh, pasteurized milk after about a year in the southern city of Karachi in December. The company was hampered by the city’s frequent power outages, said Nauman Khan, research head at Foundation Securities.
Nestle is “going in the right direction as demand is rising for branded products with the upper-middle class becoming more hygiene-conscious.” Amreen Soorani, an analyst at Karachi-based JS Global Capital, said by phone. Home delivery “is more convenient and makes it more accessible.”
Pakistan’s sale of processed drinking milk products are projected to have more than double in the past five years to 134.6 billion rupees in 2014, and are forecast to reach 203 billion rupees by 2019, according to Euromonitor International.
Batato said he expects the Pakistani processed milk market to grow to 7 percent or 8 percent in five years. “It won’t be a step change like Turkey.''
Turkey gave farmers incentives to sell milk to documented processing companies as part of its efforts to join the European Union, which boosted the share of the pasteurized-milk sector to 70 percent from 10 percent, according to Batato.
Pakistan’s middle class more than doubled to 84 million in 2002-2011, bringing almost half the nation into that segment for the first time, according to a study by Dr. Jawaid Abdul Ghani, a professor at the Karachi School for Business and Leadership, published last year.
Full Capacity
Nestle started its Pakistani operations in 1988 in a joint venture with Milk Pak Ltd. before taking over management of that company four years later, according to company’s website. About 80 percent of revenue is generated from milk and nutrition products including baby formula and cerelac, while the rest comes from water and beverages, according to data compiled by Bloomberg.
The company’s powdered milk plants in Pakistan are running at ‘‘full capacity,” Batato said. “We are taking every single drop. There is an opportunity to import tactically a bit, but this is not our business model.”

Anonymous said...

A farmer from the northern state of Rajasthan committed suicide during a rally organized by the Aam Aadmi Party (AAP - anti-corruption party) in New Delhi on Wednesday (Indian Express, Economic Times). The farmer used a towel to hang himself off a tree, and also left a note stating that his crops had been destroyed by the weather. New Delhi Chief Minister and AAP leader Arvind Kejriwal was present at the rally to protest the land acquisition bill introduced by the Prime Minister Narendra Modi government. Opposition parties have united to oppose the land acquisition bill, stating that the bill will force farmers and the poor to lose their lands. In 2014, the government used an executive order to amend the land acquisition bill and facilitate the buying of land for industrial projects. Indian Home Minister Rajnath Singh ordered a probe into the suicide and expressed his grief over the suicide.

Riaz Haq said...

INDIA’S monsoon is one of the world’s most important weather events. About half of the country's population—that is, 600m people—depend directly on the rain it bears. The monsoon sweeps northward across the subcontinent, bringing moist air from the south and south-west Indian Ocean. As it hits the land, and especially as it rises towards the Himalayas, it dumps its cargo of water, producing about three quarters of India’s total rainfall between June and September. Two-thirds of Indian agriculture is still fed by this rain, rather than by irrigation, which means India’s harvest depends on it. When the monsoon fails, as it has done this year, millions suffer. Crops wilt or fail altogether, farm land dries up, reservoirs, already too-small, run low, and winter crops (which are mostly irrigated) are imperilled. In some places this year, a lack of rain has led to shortages of drinking water.

Like all weather patterns, the monsoon is erratic. Four years in ten count as abnormal. But this year—in which total rainfall is 14% below the 50-year-average between June and September—is exceptional. Droughts of this sort happens about once every 18 years. There is also extreme variation within the variation. Some parts of the country, the western state of Gujarat for example, have seen higher-than-normal rainfall. Others, especially in the north and the eastern coast, have had precipitation that is 40% below average.

Climate change seems to be making the variations more extreme. The Intergovernmental Panel on Climate Change, an international group of scientists who advise governments on global warming, has warned that because of climate change monsoon rainfall extremes are likely to increase. But exactly why this should so be is up for debate. No one yet fully understands the link between the monsoon and El Niño, a warming of the waters in the central and eastern Pacific Ocean. Over the past century, most climate scientists have argued that a strong El Niño is associated with a weak monsoon because, as the Pacific warms, the air rises and comes down again over the subcontinent, driven by prevailing wind patterns. This descending warmer air is associated with higher pressure, less moisture and a weaker monsoon. The current El Niño is the strongest since 1997 and 1998, according to Australia’s Bureau of Meteorology, and will be at its most powerful at the end of the year.

During the 1980s and 1990s, however, this link seemed to be broken. The year 1997 saw one of the strongest El Niños on record, but a normal monsoon. Balaji Rajagopalan of the University of Colorado, Boulder, argues that the puzzle can be explained by looking at which part of the Pacific warms up during an El Niño. If the eastern waters warm, the air comes down again over Indonesia and South East Asia, which tend to be drier than normal. But this may not affect India. If the central Pacific warms, the high pressure tends to form over India and the monsoon fails. If Professor Rajagopalan is right, this year’s El Niño is getting stronger in the central Pacific than in the east. The Indian Meteorological Department is hoping to incorporate this information into its monsoon forecasting system.

Riaz Haq said...

University of #California #Davis, #Pakistan launch $17M food,agriculture Center For Advanced Studies at #Faisalabad …

The launch of a $17 million collaborative project linking UC Davis and Pakistan’s leading agricultural university was celebrated today at UCD, which will receive $10 million of the funds.

The new U.S.-Pakistan Center for Advanced Studies in Agriculture and Food Security, funded by the U.S. Agency for International Development, will make it possible for faculty members and graduate students from both countries to study and do research at each other’s campuses. The project also is designed to update curriculum and technical resources at Pakistan’s University of Agriculture, Faisalabad.

Present for today’s ceremonial launch were dignitaries from Pakistan, USAID and UCD.

“UC Davis has been partnering with colleagues in Pakistan since 2009, sharing expertise in agriculture from crop production to post-harvest handling,” said James Hill, associate dean emeritus of International Programs for the College of Agricultural and Environmental Sciences at UCD.

“Establishment of this new center will allow us to build on those efforts, with a renewed emphasis on an exchange of faculty and graduate students,” he said.

During its first year of funding, the center will plan several workshops to assist the University of Agriculture, Faisalabad, with technology transfer and entrepreneurship to strengthen its connections to the private sector. UCD also will initiate programs in both research and curriculum development to improve graduate studies.

Hill noted that two other Pakistan-focused projects are already underway through the International Programs office, primarily in the area of horticultural crops and agricultural extension activities.

Agriculture is the largest sector of Pakistan’s economy, providing jobs for half of that country’s labor force. Some of the traditionally important crops in Pakistan are wheat, cotton, rice, sugar cane and maize. In recent years, crops like beans, peas, lentils, onions, potatoes, chilies and tomatoes also have increased in importance, along with fruit crops such as citrus and mangoes.

The newly funded center at UCD is the most recent of several partnerships of the U.S.-Pakistan Centers for Advanced Studies, a $127 million investment from USAID, linking universities in the two countries and using applied research to solve Pakistan’s challenges in energy, water and food security.

The overall program includes construction of laboratories, research facilities and libraries in Pakistan. Other participating U.S. universities include the University of Utah and Arizona State University, focusing on water and energy, respectively.

Riaz Haq said...

#MIT and #Harvard Graduates Helping #Pakistan Farmers Make Big Money!

Ricult is an endeavor by a US-based start-up founded by 4 MIT and 1 Harvard graduates. They help smallholder farmers (< 10 acres holding) reduce information asymmetry and work their way out of poverty to become more impactful economic actors. At the heart of their concept is a virtual marketplace which allows farmers to procure agriculture inputs (seed, fertilizers, pesticides etc.), access interest-free/low interest based loans transparently and sell their produce directly to buyers (processing plants, corporate organizations etc.) directly from the Ricult marketplace.


Usman Javaid, (CEO) is an MIT alumnus with 15 years of experience in Telecom, Mobile Banking, Mobile Agriculture in Pakistan and Bangladesh. Jonathan Stoller, the CTO pursued his Masters in Computer Science from MIT and worked for 4 years with Google, Microsoft, Dow Jones. Aukrit Unahalekhaka handles the product at Ricult is also an MIT alumnus belongs to a family of farmers in Thailand. He worked with Accenture & Cisco in the US before taking the entrepreneurial plunge. Philip Huppe who takes care of Social Development is a Harvard alumnus. He worked with World Relief, Palo Alto Networks, and Accenture before joining hands with MIT alumni to start-up!


Their first pilot for 400 farmers is underway in Kasur area of Pakistan, where they have signed up leading agriculture organizations to supply products on the Ricult Marketplace. “The idea is to validate certain hypotheses regarding technology adoption, impact on farm profitability, technology sustainability and the reaction of local middlemen. Based on the results of the pilot, we plan to commercially launch in Pakistan, followed by China, Thailand, and Slovenia,” says the Harvard graduate.

The marketplace connects farmers to farm input sellers; farm produce buyers, bank creditors, insurers, vetinary services, farm advisory services and everything that can help them have better farming results. “But this is not just a marketplace for farmers. We believe in building strong relationships with our local farmers and ensuring that they have easy access to bigger markets, quality products, enhanced profitability and hence a better future,” says Usman.
We asked the founders if they doubted what they were doing, and they said, “Oh yes, many times you have doubts about what you are doing. Entrepreneurship is a roller coaster of emotions – it’s not for the weak hearted nor is it for the people who are impatient for results. You have to bide your time, one step at a time and take each day as it comes.”

All the co-founders started up with a passion for solving difficult social problems through the use of technology. “This is how all of us came together and this is what binds us as a team. We like solving hard but real problems that would make the world a better place,” says Usman. They are partnering with various multinational and local organizations to facilitate the growth of Ricult. Currently a team of 10 people, the start-up is not funded.

As a message for future entrepreneurs, Jonathan says, “Live your passion and your dreams. Be focused and consistent, and you will reach your destination.”

Riaz Haq said...

PARC approves 16 projects worth Rs1.2bn

The Pakistan Agricultural Research Council (PARC) has approved 16 research projects with a total budget of Rs1.2 billion for 2016-17.

In addition, the PARC board of governors approved Rs194 million for projects under international cooperation and Rs183m for Agriculture Linkage Programme (ALP).

Talking to Dawn on Thursday, National Agricultural Research Centre (NARC) Director General, Dr Mohammad Azeem Khan said a hybrid seed processing plant will be set up at the NARC with a view to provide clean, treated and high quality seeds to farmers.

He said agricultural research facilities are now being extended to tribal agencies, particularly Waziristan.

The Arid Zone Research Institute in Dera Ismail Khan will also be expanded at the same time, he said.

Under a project, pesticides residue analysis laboratories will be set up in all parts of the country. These laboratories will cover food chains, health, and environment and production technology with a view to pursue international standards.

According to Dr Azeem, three projects will be set up in Balochistan covering horticulture and livestock.

The NARC is also developing a mechanism for the establishment of demonstration units of yogurt under public-private partnership (PPP).

The PARC has recently recommended 14 rice hybrids for different ecologies, two wheat varieties: ‘Borlaug 2016’ and ‘Zincol 2016’, two sugarcane varieties: ‘Thatta 2109’ and ‘Thatta 326’, working on commercialisation of genetically modified (GM) crops, and bioremediation on 86 sites full scale wastewater treatment facilities through Pakistan.

The performance of various PARC projects — including mobile veterinary clinic services, feed technology unit, high eggs and meat producing chicks, ostrich breeding facilities, American channel catfish hatchery at NARC, Tilapia hatchery and aqua feed production to promote intensive fish culture in the country — was also reviewed by the board of governors at a meeting.

Riaz Haq said...

#India Farmer Suicides Up 42% In 2015. Over 300,000 #Indian #farmers' #suicides since 1995. #Modi #BJP #AchcheDin

Monday, January 02, 2017

Suicides by farmers in India increased 42%, while those by agricultural labourers declined 32% in 2015, a second consecutive drought year after 2014, according to data on accidental deaths and suicides in India, released by the National Crime Records Bureau (NCRB) on December 30, 2016.

Indebtedness was listed as the primary reasons for suicides by farmers (3,097), while “family problems” was the leading reason for suicides by farm workers (1,843).

Suicides by farmers and agricultural labourers combined increased 2% over an year to 12,602 in 2015 from 12,360 in 2014. More farmers than agricultural labourers committed suicide in 2015–8007 farmers (64%) and 4595 farm workers (34%). In 2014, 54% were farm workers.

More than 300,000 Indian farmers have committed suicide since 1995, the year NCRB began recording data on farm suicides.

Source: Report on Accidental Deaths and Suicides, NCRB 2015

The average landholding declined 20% over 15 years, from 1.41 hectare in 1995 to 1.15 hectare in 2010, according to the latest agricultural census,, a data journalism portal, reported in December 2015.

These data indicate marginal farmers also work as farm workers, potentially blurring the distinction between farmer and farm worker.

After declining 32% over four years to 2013, farmer suicides rise again

Farmer suicides reduced 32% from 2009 till 2013–a good monsoon year–after which they have increased every year.

As many as 17,368 farmers and agricultural labourers committed suicide in 2009, a drought year nationwide. Suicides declined to 11,772 in 2013, rising 5% to 12,360 in 2014 and 8% over two years to 12,602 in 2015.

Source: Historical reports on Accidental Deaths and Suicides in India, NCRB 2015

Maharashtra reports most farmer suicides, 7 years in succession (at least)

For the seventh year in succession at least (data prior to 2008 are currently unavailable on the NCRB website), more farmers committed suicide in Maharashtra (4,291) in 2015 than any other state, rising 7% from 4,004 in 2014, followed by Karnataka (1,569) and Telangana (1,400).

Karnataka registered a 100% rise with 1,569 suicides in 2015.

Source: Report on Accidental Deaths and Suicides in India, NCRB 2015

Gujarat, Kerala, Rajasthan and Tamil Nadu were among the big states that reported a fall in farmer suicides. Farmer and farm worker suicides in Gujarat halved, from 600 in 2014 to 301 in 2015.

Failure of crops kills 1,500 farmers in 2015

Apart from indebtedness, which is the primary reason listed in the data, crop failure is the next leading reason listed in the suicides of 1,562 farmers in 2015.

As many as 842 farmers reportedly committed suicide due to various illnesses, while 330 farmers killed themselves due to drugs and alcohol, according to the data.

Suicides due to bankruptcy more than doubled to 3,097 in 2015 from 1,163 in 2014. Suicides after crop failure increased 60%, from 969 to 1,562 over the same period.

Only four states–Maharashtra with 1,293, Karnataka with 946, Telangana with 632 and Andhra Pradesh with 154–among 29 states registered more than 100 suicides by farmers due to indebtedness.

Of 12,602 farmers and labourers who committed suicide, 92% or 11,584 were male, while 1,018 were female.

“Family problems” was the second-leading cause for suicides by women farmers, accounting for 18% of deaths reported.

About 896, or 20% of suicides by agricultural labourers and 899, or 11% farmers suicides, were from ‘other causes’ and ‘causes not known’.

Riaz Haq said...

Why #monsoon matters so much for #India - 66% pop are #farmers. 60% of land rain dependent

Despite big strides in industry and services, two-thirds of Indians depend on farm-based income. Nearly 60 percent of the country’s farms lack irrigation facilities, leaving millions of farmers dependent on the rains.

The monsoon is critical to replenish 81 reservoirs necessary for power generation, irrigation and drinking. About half of India's farm output comes from summer sown kharif crops such as rice, sugar, cotton, coarse cereals.

The monsoon also refills 81 nationally monitored water reservoirs crucial for supply of drinking, power and irrigation water supply.

The June-September monsoon is likely to be 96 percent of the long-period average, the Met department said on Tuesday, a forecast that will be cheered by millions of farmers and the government alike.

The south-west monsoon, besides bringing relief from a blazing summer, serves as the lifeblood for the critical summer-sown kharif crop. Here's why the monsoon matters so much for India:

What is monsoon?

It is essentially a shift in the prevailing wind patterns. Drafts of breeze from the south Pacific travel northwards, carrying moisture along the way. It traverses nearly 8,000 km before reaching the Asian land mass, resulting in rainfall and offering respite from a sweltering summer.

How is it distributed across India?

Kerala is the south-west monsoon’s first port of landfall in mainland India. It arrives in Kerala in the first of week of June, having covered Andaman and Nicobar islands a week before. After hitting Kerala, it breaks out into two branches: one over the Bay of Bengal and the other over the Arabian sea. In a normal year, it covers the entire country in a month. It hits Maharashtra around June 15 and Delhi around June 29 before travelling further north-west.
Is monsoon essentially an Asian phenomenon?

No. Monsoons happen in the world’s other regions too such as Europe, Chile, Africa and North America.

How is the monsoon’s progress recorded?

Satellite images now allow weather scientists to fairly monitor monsoon’s course and quantum. According to the Met’s classification, the monsoon is considered normal if rains are between 96-104 percent of the 50-year average rainfall of 89 cms. The monsoon is taken to be below normal if rains are between 90–96 percent. If less than 90, it is considered deficient.

Why is the monsoon so important for India?

Despite big strides in industry and services, two-thirds of Indians depend on farm-based income. Nearly 60 percent of the country’s farms lack irrigation facilities, leaving millions of farmers dependent on the rains.

The monsoon is critical to replenish 81 reservoirs necessary for power generation, irrigation and drinking. About half of India's farm output comes from summer sown kharif crops such as rice, sugar, cotton, coarse cereals.

The monsoon also refills 81 nationally monitored water reservoirs crucial for supply of drinking, power and irrigation water supply.

Riaz Haq said...

Western capitalist view in Forbes: But India's Farmers Should Go Bust, That's How Economic Development Works

There are protests, and calls for political action, over the plight of India's farmers at present--and the one important point we've got to get across to people is that India's farmers should be going bust because that's how economic development actually happens. People stop doing low productivity things like rain fed labour intensive agriculture and go off and do more productive things like working in factories or producing services. It's entirely true that we should make the transition as painless as possible, no doubt about that, but we do not want to be preventing the change from happening because that just keeps everyone poorer than they need to be. The harsh truth is that not being able to make a living doing something is the universe's method of telling you you should be doing something else. This is as true of farming as it is of buggy whip manufacture. We are all, the people doing the labour most of all, made richer by people moving from low productivity activities to higher.


The political reaction to this we understand, of course we do. Some 50% or so of Indians are involved in this low productivity agriculture and they've all got the vote. But that doesn't change the economics here, which is that we'd really very much like people to stop being farmers and go and do something else more productive.


India has some 50% or so of the population in that agriculture and the output has a value of some 15% or so (rough numbers) of GDP. Both what will mark out India as a rich country, and what will make it one, is when the labour and output profiles of agriculture are similar to those other rich countries. Because that's just what getting richer as a whole means. That the vast majority of the population stops standing around in muddy fields and goes off to do something more productive instead. It's not just that this is what has happened everywhere that has got rich it's that this is the very definition of a place and population getting rich.

Not being able to make a living farming is the universe's way of telling you to do something other than farming. India should smooth the transition, certainly, but not subsidise people to remain farmers.

Riaz Haq said...

Pakistan could eat India’s share of basmati rice exports

Pakistan could target India’s basmati rice share in the global market, a likelihood sparked by stringent policies placed by the European Union (EU) on the presence of hazardous pesticides in the commodity, said an official.

From January 1, 2018, all countries that export basmati rice to the EU must bring down the maximum residue limit (MRL) level for Tricyclazole, a pesticide, to 0.01 mg per kg. Up till now, the EU was accepting 0.03 mg per kg from different countries, including India.

The chance that Pakistan could eat up a share of India’s market comes from the fact that the country’s farmers do not use such chemicals to protect their crops.

However, Indian farmers widely use the pesticide under scrutiny and exporters fear that up to 95% of basmati shipments could take a hit by the new regulation.

Since new EU regulations could completely choke off Indian basmati exports, an Indian government delegation is leaving for Brussels this week to discuss the restrictions.

On the other hand, a Pakistani basmati exporter says this presents an opportunity to grab India’s market share, because it will at least take two cycles to reduce the consumption of Tricyclazole in the country.

“Pakistan currently exports 100,000 tons of basmati to the EU a year, which can go up to 250,000 tons per annum after EU regulations,” Matco Foods Pvt Limited Director Faizan Ali Ghori told The Express Tribune.

India, the world’s biggest exporter of basmati rice with a share of about 70%, exported 350,000 tons of basmati to the EU worth $268 million in fiscal year 2016-17.

Raising Rs1 billion from the stock market

Meanwhile, Matco Foods – one of the leading basmati rice exporters in Pakistan – is expecting to raise Rs1 billion through the Initial Public Offering (IPO) it has planned for around September this year.

The company plans to invest the proceeds in its two rice glucose plants in Karachi. Rice glucose is the main ingredient for pharmaceutical, confectionery, and juice industries.

“We want to move towards value added products to increase exports,” said Ghori.

The company exports rice to over 60 countries.

Matco’s first rice glucose with a capacity of 10,000 tons per annum is being commissioned in Karachi at an investment of Rs350 million. The other factory will have a capacity of 20,000 tons that will be set up in the next one to two years.

The company will prefer international markets as it expects to fetch as much as $11,000 per ton against a price range of just $400-$500 per ton in the domestic market, Ghori said, adding that there is a growing demand in western markets for rice glucose.

Currently, there are two rice glucose factories in Pakistan – both in Karachi due to proximity to ports and export markets.

Matco’s management believes the demand for rice glucose will increase because it is not genetically modified and safer for children. At present, over 90% domestic demand of pharmaceutical and confectionary industries is being met by corn glucose.

CPEC opens avenues for agri-exports

“There is so much room for diversification in rice exports because Pakistan does not make value added products from rice that have huge domestic as well as international demand,” he added.

Riaz Haq said...

#Farmer #suicides rise in #India as #climatechange takes its toll

When Rani's husband died by drinking pesticide, he left the family in debt. But even if they could pay off the loans, Rani said their farming days are over.
"There are no rains," said the 44-year-old woman from drought-stricken Tamil Nadu, one of hundreds of farmers protesting in the capital for more government support. "Even for drinking, we get water only once in 10 days."
A new study suggests that India will see more such tragedies as climate change brings hotter temperatures that damage crops and exacerbate drought. For every 1 degree Celsius (1.8 degrees Fahrenheit) of warming above 20 degrees C (68 degrees F) during the growing season in India, there are 67 more suicides on average, according to the findings published Monday in the Proceedings of the National Academy of Sciences, or PNAS.
The message "is that farming is an inherently risky occupation, with annual incomes often held hostage to the weather, and it's getting riskier in the era of climate change," said Vikram Patel, an Indian psychiatrist and mental health expert with Harvard Medical School in Boston who was not involved in the study.
Experts said the study's findings should raise alarms, especially with India's average temperatures expected to rise another 3 degrees C (5.4 degrees F) by 2050. That will bring more erratic weather events, more drought and stronger storms.
"Anything that will affect occupational stability is going to affect farmers' mental health," Patel said.

Farming has always been considered a high-risk profession, and a single damaged harvest can drive some to desperation. With agriculture supporting more than half of India's 1.3 billion people, farmers have long been seen as the heart and soul of the country. But they've also seen their economic clout diminish over the last three decades. Once accounting for a third of India's gross domestic product, they now contribute only 15 percent of India's $2.26 billion economy.


He acknowledged that the number of farmer suicides had gone up by about 9 percent in each of the previous two years, both of which were marred by drought. The crime bureau found that 58 percent of the 12,602 farmer suicides in 2015 were driven by bankruptcy, indebtedness and other farming-related issues. Most of the victims were marginal cultivators or small farm holders with less than 5 acres of land.
"Suicides occur due to extreme economic despair," said M.S. Swaminathan, a geneticist whose work on high-yield rice and wheat crops helped drive India's Green Revolution in the 1960s. His research in the late 1980s found that a 1.8 degree Fahrenheit temperature rise reduced a crop's duration by about one week, causing losses in the overall weight of harvest. His foundation works to find farming solutions not only to rising heat, but also to drought or salinity from coastal sea rise. Given these growing risks, he said, government policy has a large role to play."Suitable crop insurance and a prompt compensation of losses due to climate-related factors will help to avoid a sense of hopelessness that leads to suicide," Swaminathan said.

Riaz Haq said...

#CPEC provides avenues for #Pakistan to get a big slice of $100 billion #China's food imports

The China-Pakistan Economic Corridor (CPEC) is a golden opportunity for overall development of this region and Pakistan should reorganise its agriculture sector to get a major slice of the $100 billion worth of agriculture produce imports by China, suggested Muhammad Mehmood, Punjab Agriculture Secretary.

Speaking at the launch of a study on “CPEC – Prospects & Challenges for Agriculture”, Mehmood pointed out that nearly one-fourth of the world’s population was living in China and most of its exports would be routed through Pakistan after the completion of CPEC. “Containers full of exportable surplus will be sent to various international markets, but on their return, these containers will be empty and we must capitalise on the opportunity to export our surplus agriculture produce to China,” he said.

Mehmood revealed that per capita income of China was increasing substantially, bringing a visible change in people’s lifestyle and food habits there. “Like other affluent societies, they also prefer rich and costly food and fruits,” he said, adding Pakistan could get maximum benefit of the emerging change.

“We are concentrating on high-value crops and a 10-year programme has been evolved to develop one lakh acres of land in the Potohar region for planting grape and other high-value crops.”

Major Chinese importers will also be invited to utilise this land for growing high-value fruits in addition to developing the agriculture processing industry on modern scientific lines.

“Its trickle-down effect will provide an opportunity to our farmers to upgrade their technologies and develop agriculture as a profitable business by shunning centuries-old practices,” Mehmood said.

He told the audience that foreign consultants had been engaged to analyse why Pakistan had not been able to get its due share in Chinese imports despite its friendly relations and close proximity.

He suggested that Pakistan should renegotiate the bilateral trade agreement and a meeting was expected in the current or next month. After that, “we would be in a position to decide which strategy is suitable for Pakistan to enhance its share in Chinese imports.”

Responding to a question about a research project on the China-Pakistan agricultural technical cooperation, the agriculture secretary insisted that the Punjab Agriculture Research Board was extending liberal grants to the viable projects planned by the public and private sectors.

“Initially, Rs259 million had been allocated for this purpose. The funding was immediately increased to Rs750 million and it would be further enhanced to Rs3 billion in the next three years,” he said.

He asked the Faisalabad Chamber of Commerce and Industry president to send the project to the research board where a group of experts would review its viability and approve the requisite grant.

Riaz Haq said...

Drifting apart: The gap between #India’s richer and poorer states is widening. #Inequality #Modi … via @TheEconomist

COUNTRIES find it easier to get rich once their neighbours already are. East Asia’s growth pattern has for decades been likened to a skein of geese, from Japan at the vanguard to laggards such as Myanmar at the rear. The same pattern can often be seen within big countries. Over the past decade, for example, China’s poorer provinces have grown faster than their wealthier peers. India is different. Far from converging, its states are getting ever more unequal. A recent shake-up in the tax system might even make matters worse.

Bar a few Mumbai penthouses and Bangalore startup offices, all parts of India are relatively poor by global standards. Taken together, its 1.3bn people make up roughly the third and fourth decile of the world’s population, with an income per person (adjusted for purchasing power) of $6,600 dollars. But that average conceals a vast gap. In Kerala, a southern state, the average resident has an annual income per person of $9,300, higher than Ukraine, and near the global median. With just $2,000 or so, an Indian in Bihar, a landlocked state of 120m people, is closer to a citizen of Mali or Chad, in the bottom decile globally.

The gap has been widening. In 1990, point out Praveen Chakravarty and Vivek Dehejia of the IDFC Institute, a think-tank, India’s three richest large states had incomes just 50% higher than the three poorest—roughly the same divergence as in America or the EU today, and more equal than in China. Now the trio is three times richer (see chart).

In some rich parts of the world, income gaps between regions have in recent decades been widening. But India’s experience still puzzles economists. Poor regions benefit from technology developed in richer ones—from trains to mobile phones. Workers in poorer places accept lower wages, so firms build new factories there.

The catch-up process ought to be all the faster if barriers to the movement of goods or people are lower. Regions within China have converged rapidly, partly owing to the market, as factories move production inland where wages are cheaper, and partly to government attempts to lift poorer regions by investing heavily in their infrastructure.

Arvind Subramanian, chief economic adviser to India’s government, earlier this year wrote that its states’ divergence is “a deep puzzle”. The brief bout of liberalisation in 1991 probably played a part initially, by unevenly distributing the spoils of more rapid overall economic growth. But that burst of inequality should have self-corrected by now.

One theory blames the states’ divergence on their isolation even in the Indian domestic market, as a result of lousy infrastructure, red tape and cultural barriers. Moving stuff from state to state can be as tiresome as exporting. Internal migration that would generate catch-up growth is stymied by cultural and linguistic barriers: poor northern states are Hindi-speaking, unlike the richer south. Cuisines differ enough for internal migrants to grumble. It is harder to have access to benefits and state subsidies outside your home state.

Mr Subramanian thinks such arguments are overdone. India may not have mass migration on the scale that transformed China, but it is still sizeable, he argues, and has been rising as a share of the population even as convergence has gone into reverse. Inter-state trade is healthy, suggesting suitably porous borders.

Another theory looks at India’s development model. Growth has relied more on skill-intensive sectors such as IT than on labour-intensive manufacturing. This may have stymied the forces of convergence seen elsewhere, Mr Subramanian posits. Perhaps, however low their labour costs, the poorer places lack the skills base to poach jobs from richer rivals.

Riaz Haq said...

India is one of the world’s most unequal countries: James Crabtree
In an interview with Mint, journalist and author James Crabtree talks about the rapid rise of India’s ultra-rich and the crony capitalism and inequality that have accompanied such concentration of wealth

You argue in your book that the Left in India approaches the issue from the same angle. They care largely about how people at the bottom are doing rather than inequality per se.

This, I thought, was interesting. The totemic intellectual debate in India’s recent past has been between Jagdish Bhagwati and Amartya Sen. In a sense, neither of them places inequality front and centre. For Jagdish, it’s growth that matters, everything else can follow. For Amartya, what matters is the condition of the people at the bottom. Neither of them is really looking at the gap between the top and the bottom. That means you’re missing an important component of what makes a successful growth model.

Inequality isn’t just about the billionaires, it’s about the fact that the top 10%, and particularly the top 1%, have done disproportionately well. The vast mass of everyone else, including those who you’d consider to be middle-class, although in absolute terms they’re doing much better, in relative terms they’re doing much worse. That’s not how you build a successful country. It’s pretty clear that very unequal countries find it much harder to modernise. Look at Latin America, that’s the classic middle income trap. Countries that have managed to break through to become rich countries either have fantastic natural resources—like the oil emirates, and they’re not the ones you want to follow—or they’ve managed to create a kind of social and economic model that takes everyone along with them.

What happens if India continues on this path of the top pulling away from the rest? What does that mean for modernisation and reform?

Reforms are complicated, they require winners and losers. You have to have a sense that the winners will look after the losers. Farmers, for instance. This is not a good time for them. A lot of them are going to have to work somewhere else because India desperately needs a much smaller and more efficient farm sector. But if the sense is that everyone’s in it for themselves, then that makes it much more difficult to create the coalitions that you need for such changes.

Riaz Haq said...

The situation for India’s more than 260 million agricultural workers is dire. Nearly 30 people in the farming sector die by suicide daily, according to the most recent figures available, typically due to overwhelming debt. Indeed in 2020, more than 10,000 people in the agricultural sector ended their own lives, according to government data.'s%20more,typically%20due%20to%20overwhelming%20debt.

India’s economic backbone – its farmers and their families – is in collapse. They face crushing pressures: insurmountable debt, environmental degradation, and extreme rates of cancer linked to exposure to pesticides.

Riaz Haq said...

The challenge of shrinking farm sizes

Many research studies have explored and proven the inverse relationship between farm size and crop yields. In Pakistan, the solution undeniably lies in consolidating agricultural holdings into somewhat larger and more efficient farms. But the real challenge is to devise and execute effective policy measures. Among the options explored, cooperative farming and corporate farming are often the most cited.

In Pakistan, the average farm size has steadily declined from 5.3 hectares in 1971 to 3.1 hectares in 2000 and then subsequently to 2.6 hectares in 2010 (Agricultural Census 2010). As a result, the agriculture sector is now dominated by smallholders. Over 90 per cent of farms are smaller than 12 acres, out of which 67pc are below even five acres (two hectares).

The majority of farms have become so small due to successive land divisions that they are no longer economically and operationally viable. Small size is a major limiting factor for increasing labour and land productivity, mechanisation of farms, optimal application of quality farm inputs, and adoption of advanced agricultural practices and technologies.

At the same time, more than 8.2 million farms pose a serious challenge for the government to provide extension services, offer credit facility to all farmers, enhance their effective access to the market and even implement government programmes for farmers, primarily due to the high transaction costs involved. All these challenges translate into higher production costs and, in turn, a lack of competitiveness. As a result, farmers demand farm subsidies, putting additional pressure on the country’s scarce financial resources.

Interestingly, in East Asian countries like South Korea and Japan, instead of shrinking, farm sizes are increasing. In fact, thriving manufacturing and service sectors have provided lucrative employment opportunities, resulting in labour migration from agriculture to non-agriculture sectors.

Many research studies have explored and proven the inverse relationship between farm size and crop yields. In Pakistan, the solution undeniably lies in consolidating agricultural holdings into somewhat larger and more efficient farms. But the real challenge is to devise and execute effective policy measures. Among the options explored, cooperative farming and corporate farming are often the most cited.

Cooperatives (associations of persons united voluntarily) have been successful in many countries in empowering farmers to pool in multiple lands together, use collective bargaining to buy agricultural inputs and sell their produce, and collectively undertake value addition to attain greater efficiencies. Their success can be gauged from the fact that cooperatives in Europe have over 40pc market share in agri-food supply chains, whereas, in the USA, around 75pc of the country’s milk is marketed by dairy cooperatives.

Due to the peculiar socio-cultural context of our rural areas, particularly in Punjab and Sindh, people do not exhibit an inclination towards working together for common needs and aspirations. Therefore, cooperatives in the agriculture sector could not reap the desired results. In Pakistan, cooperatives often do not hire professional managers. Therefore, when the majority of members lose interest in managing the organisation due to one reason or another, a small group takes control and manages it for their own gains and interests.

Another widely mentioned option is corporate farming (large-scale agriculture by large companies). The arguments in favour include companies’ greater capacity and financial muscle to introduce mechanisation and new technologies, undertake effective marketing of farm produce, develop linkages with national and international value chain players, and improve farm and area infrastructure. All these factors result in higher productivity and competitiveness.