For all his conservative economic rhetoric of tax cuts and free markets, US President George W Bush could not be more socialist when it comes to his country’s 24,800 cotton farmers. They can dip into sophisticated cash subsidies when global prices fall, get crop insurance. The icing: importers buying American cotton get loans from the US government.
The annual bill for this subsidy programme, according to the United Nations, is $4.7 billion (Rs 20,874 crore). That’s Rs 84 lakh per American farmer.
These intricate subsidies are now proving to be one of the prime reasons — unkept state government promises and moneylenders are others — why ‘king cotton’ is now a liability for Vidarbha’s 1.7 million farmers in northeast Maharashtra, which grows a fifth of India’s cotton.
Four months ago, an alarmed Prime Minister Manmohan Singh visited Maharashtra’s cotton belt to address the 600 suicides by its farmers over the preceding year. The PM announced aid of Rs 2,177 crore to complete long-pending dams and handouts to distressed families for education and health expenses.
Only, 454 more farmers have killed themselves since then. That’s over 100 per month, compared to 50 before Singh visited.
Planning Commission member and economist Abhijit Sen, who accompanied the PM to Maharashtra’s suicide zone, acknowledges the cotton economy is collapsing. “Things can no longer revolve only around cotton,” Sen told HT. “Vidarbha urgently needs crop diversification.”
As for CM Vilasrao Deshmukh’s government, its ministers promised Rs 2,700 per quintal during the 2004 elections but have since reneged, insisting the state stick to the national average at which the government buys cotton, Rs 1,950 a quintal. That’s the same as a decade ago.
National Commission on Farmers Chairman MS Swaminathan argued that the state must respond. “Ensuring a remunerative price — at least 50 per cent more than the farmer’s cost of production — to our growers would help end suicides,” he told HT. Swaminathan added that raising tariffs on cotton imports to 60 per cent from the current 10 per cent — experts said that since the US exports 65 per cent of its cotton, its domestic subsidies depress world prices — would also help redress the depressed cotton price Indian farmers suffer.
For now, mention “PM’s package” in Amravati’s Dhamangaon, Manmohan Singh’s first stop in Vidarbha, and the anger is evident. “Did Singh bother to see what price we are getting for our produce?” asked Babanrao Bhujbal, whose elder son Raju killed himself in March, his sprawling 18-acre farm no longer the asset it once was.
Widow Vanita brings out a scrawled one-page suicide note she retrieved from her dead husband’s trouser pocket. In it, Raju tersely asks that the government wouldn’t fix the correct price for cotton and oranges, so did it expect “farmers’ children to steal?”
For all the PM’s largesse, he did not address the farmers’ primary agony: income.
State data reveals that the prices the state pays for cotton have been lower by 20 to 30 per cent than the Rs 2,400 to Rs 2,700 the farmer spends to grow each quintal. An October state report to the UN’s Food and Agriculture Organisation admitted: “Farmers’ have been living with a negative return for years.”
“We are spending more each year on seeds, pesticides, pumping groundwater, and labour,” said farmer Bhujbal. “But there hasn’t been a similar rise in price.”
Commission for Agricultural Costs and Practices Chairman Professor T Haq told HT, “We agree Rs 1,950 does not cover costs, especially in Vidarbha where BT has not been a success.” A senior Maharashtra State Cooperative Cotton Grower’s Marketing Federation official, explained the state’s dilemma. “We know the price is not remunerative, but no one is sure how to help, since we cannot insulate ourselves from global prices,” he said. “If we raise prices, the textile industry will simply import from elsewhere.”
Swaminathan said fixing links between textile mills and cotton farmers would do the trick. Mills could get long-staple varieties that they want through contract farming, not highly subsidised imports.