Directorate of Economics and Statistics, Department of Agriculture and Cooperation, Ministry of Agriculture and Farmers Welfare, Government of India, New Delhi
Punjab Agricultural University, Ludhiana,India
 Sponsored by
Directorate of Economics and Statistics, Department of Agriculture and Cooperation, Ministry of Agriculture and Farmers Welfare, Government of India, New Delhi
Research Content
Market Imperfections and Farmers Distress in Punjab

          The present study was under taken to give a fresh look to the agro-economic causes of distress faced by the farming community in Punjab and to document the market conditions and infrastructure availability in product as well as factor markets. Among the list of farmers committed suicides during the last five years, 30 victim families from Bathinda, Sangrur and Moga districts of the state were approached to know the distressful conditions that led to the suicide of farmers in the state. The price policy for paddy and wheat crops had remained effective in the state. However, the gaps between procurement price and farm harvest price for these crops had been narrowing down since 1995-96 and the farmers were finding it hard to dispose of their produce. The effectiveness of price policy in case of cotton was irrelevant as the producers had not to wait for government agencies for procurement and they could sell their produce at higher prices in the open market. The indebtedness of farmers to the village traders and pesticide dealers played an important role in the marketing of cotton in Punjab. The small and marginal farmers hinted at the prevalence of corruption, as they revealed that offering money could change grading of paddy. Sometimes, price deductions were made on the basis of poor quality standards determined by private traders and commission agents arbitrarily. Also, late entry of Government agencies in the procurement of paddy and wheat contributed towards the exploitation of farmers by the private traders by offering lower prices for their produce and also delayed the payments. Suicide victims were largely concentrated in the age group of 18-37 years, as this is the age where the person has to make maximum decisions and has to share the family responsibilities. The average owned land for victim families, which was 6.57 acres declined to 4.42 acres over the last decade while for control group declined from 5.51 to 4.53 acres. The farmers had to resort for the sale of land to meet the various financial obligations of the family. The production of paddy and wheat crops was more stable in the state while the cotton crop was highly sensitive as the productivity on sample farms varied from 2.2 quintals to 7 quintals per acre. The average suicide farm household had higher burden of credit (Rs 2.14 lakh) as compared to the control farm households (Rs 1.81 lakh). Also, the proportion of non-institutional credit in total credit outstanding was higher for suicide farm households. It was strange to observe that almost all the sample households were indebted and it was the prime reason for suicide amongst 86.58 per cent of the victims. The debt burden leads to the stress in the individual’s life and about 17 per cent of the victims faced the mental trauma leading to the ultimate act of suicide. About 20 per cent of victims had to face the humiliation at the hands of the moneylenders. Sudden expenses to the farmers for marriage of daughter/sister, medical treatment and to perform various social ceremonies had also been one of the reasons of suicide. The loss of status, due to selling of the land, to meet the sudden expenses or to repay the loans was cited as the reason of suicide by 10 per cent of the victims. About 13 per cent of the victims were not even able to bear the family responsibilities and to meet the family expenses. Almost 10 per cent of the victims had resorted to suicidal act due to failure of crops, dairy and the bore wells. Frequent conflicts in the family were also cited as an important cause of suicide by about 13 per cent of the victim families. The decline in social support due to disintegration of joint family system and deteriorating standards of the village institutions particularly the cooperative culture in the state could also be one of the reasons for spurt increase in suicides in recent times in the state. The average total annual expenditure incurred on food and non-food items was lower in case of suicide families (Rs 23782) as compared to the control group households (Rs 35514). The study emphasized the need that formal institutions of credit must advance the money for the social obligations to the farmers at the rate of interest at par with the agricultural loan and should also increase the allocation of funds for the small and marginal farmers. There is also need to check illegal expenses and some other avoidable formalities for taking loans from these institutions. The agriculture department should have the strict vigilance on the poor quality of seeds and pesticides being supplied by the dealers in the state. The sale of good quality seeds and pesticide through cooperative societies should also be encouraged. The formation of self-help groups (SHGs) can also help in augmenting the income of landless and small and marginal farmers in the region. The research should be oriented towards improving the Indian cotton varieties besides going for the transgenic varieties of cotton. The small and marginal farmers should desist themselves from purchasing large machines as the cost of maintenance along with fixed cost becomes higher than that of the rent to be paid for hiring of the same machinery. In rural areas, panchayats should start a reform movement at their own level by banning certain outdated customs, traditions and rituals to control the unnecessary expenditure. The non-farm employment opportunities should be generated in villages itself through establishment of cottage industry and agro-processing plants in the region, using the locally available raw material.