Financial Daily from THE HINDU group of publications
Friday, Aug 06, 2004
Agri-Biz & Commodities
Crop failures trap cotton farmers in debt
A field of feebly-growing moong saplings and some dried up orange trees in Yavatmal district, Maharashtra. By this time, moong is usually three feet high and pods begin to form. Delayed rain has stunted their growth this year. Dinesh Narayanan
Mumbai , Aug. 5
THE rudimentary economics of agriculture has turned turtle. Consider the condition of Maharashtra's Vidarbha region, which is known for fine cotton, juicy oranges and suicidal farmers.
The only people making money here this kharif season are seed-sellers. They have sold at least two-and-half times the average sales of the previous season.
Even fertiliser and pesticide companies have been hit. Fertiliser offtake begins after the first rains.
According to Mr Vinod Dighade, Marketing Officer of Rashtriya Chemicals and Fertilisers in Amravati: "Our target is to sell 10,000 tonnes of urea. Last year, by this time we had sold nearly 8,000 tonnes. This year, so far, we have sold only about 3,000-3,500 tonnes."
Many farmers have sown thrice and are now keeping their fingers crossed. The monsoon has only tantalised so far.
"I hope at least this crop survives. If it doesn't, I do not know what to do," says Mr Suryapal Chauhan, pointing at stunted soyabean saplings on his farm in Singhnapur village.
A cotton farmer for long, Mr Chauhan has switched to soyabean because the cost of producing the white gold has risen sharply but prices have plummeted, mainly because users are importing cotton. "I still have stocks left from last year," he says.
Falling levies have made cotton imports easier and cheaper. Recently at the annual general meeting of Century Textiles, Mr S.K. Birla, Director, assured shareholders that cotton prices would not affect the company's fortunes because global prices of the commodity are falling.
"If domestic prices rise, we will import our requirement," Mr Birla told them. Not good news for those who have sown cotton.
Rising cultivation costs: Take cotton, the biggest cash crop of the region. Even though most farmers do not keep any regular accounts, it takes at least Rs 4,500-6,000 per acre to cultivate cotton.
Seeds cost ranges between Rs 500 and Rs 600 per kg for cheap varieties and Rs 3,200 per kg for Mahyco-Monsanto's bollguard variety. Fertiliser costs Rs 1,000 per acre and a like amount has to be spent on labour, says Mr Chauhan. "Pesticides cost another Rs 1,000 to spray an acre; the number of sprays depends on pest attack," he adds.
Yield can go up to about 300 kg from every acre in a good year. But some people harvested not more than 40-50 kg per acre last year. The best price farmers got last year was about Rs 2,500 per quintal. Farmers like Mr Chauhan who waited for better prices saw them plummet 25-30 per cent.
This year more farmers have switched to the hardy soyabean whose prices are currently ruling firm. Other crops such as jowar and moong are hopelessly undernourished.
Mr Babban Ramteke, a taxi driver, who also looks after his father's 10-acre farm, says: "Moong should have been about three feet high by now. The saplings have grown hardly six inches."
How the noose tightens: Many farmers had saved up a little money to buy seeds. When the first sowing failed, they were forced to go to the local moneylender because banks had refused them loans unless they cleared their previous dues.
A second failure meant more debt from the sahukar (moneylender) whose deal usually requires the farmer to repay double of what he borrows. Successive crop failure drove many a farmer to desperate measures.
Crop failure in large tracts of Vidarbha is likely to cause more suicides. The district administration of Yavatmal has recommended families of 12 indebted farmers who killed themselves as eligible for the Government's dole of Rs 1 lakh. Thirty farmers committed suicide in July in this district alone, allegedly because they were too steeped in debt.
Mr S.N. Mishra, District Resettlement Officer, Yavatmal, says almost every small farmer in the region is indebted. Mr Mishra says there is no way to determine conclusively whether the farmers killed themselves because they were unable to repay their debts.
Cost of cultivation apart, the farmer today has to pay through his nose for the livelihood of his family members, which usually includes farm animals.
For example, a bag of cattle-feed today costs about 10 times more than what it was a decade ago. Crop failure adds to his burden because he has to even buy hay for his animals.
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