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Last Updated: Monday, 1 May 2006, 23:00 GMT 00:00 UK
Debt drives Indian farmers to suicide

By Zubair Ahmed
BBC News Mumbai

The family of young cotton farmer Kailash Jhade wanted to marry him off before the cash crop season began in June. The timing is considered auspicious, and symbolises hope.

Bank demand
Demands from banks and money-lenders often trigger suicide

But the family's hopes were dashed when they discovered their eldest son's body in a communal well a few weeks ago.

Why did he kill himself? "Mounting debt," his family said.

The 26-year-old farmer's cousin, Pramod Manorathi, knew how disturbed he had been.

"He had a loan from the bank and he used to be quite worried about how to pay it back," he says. "He often thought about how he'll finance his wedding."

Kailash was one of the most eligible bachelors in Linga village of 400 farmers, just a stone's throw from Maharashtra state's prosperous Nagpur city, famous for oranges.

Ironically, the pesticide he consumed was also bought on debt.

'Three deaths a day'

The plight of 3.2 million cotton growers in Maharashtra's cotton-growing region of Vidarbha is no different. Crippling debts have resulted in 470 farmers committing suicide since June last year.

I have to look after our two children, his old parents - and I have to pay his debt back
Rekha Bhan, farmer's widow

"On average, three farmers are killing themselves here every day," says Kishor Tiwari, who left a lucrative job with General Electric a decade ago to devote himself to the farmers' cause.

Kailash's debt - an initial loan of $200, with interest stacking up another $300 - was five times his annual income, on which he was already making a loss every year.

But relatively well-off farmers are committing suicide too.

Vitobha Shette, 40 and one of the richest farmers in the backward district of Yuvatmal's Mangi village, borrowed $6,111 from a government bank and a private village money lender.

But he wasn't able to pay the money back - so, his brother said, he killed himself.

Another wealthy farmer, Chandra Bhan, owed $3,000. On 1 April, while his family was taking the afternoon siesta, he poured kerosene all over himself and then lit a match.

Mounting demands

For men such as these, the debt trap proves a death trap.

And usually the final straw is a blizzard of money-lenders' threats and bank notices.

In Kailash's case, a bank notice was accompanied by the threat of confiscation of his land. Chandra Bhan died in hospital two days after his self-immolation saying that money-lenders' demands had pushed him to the edge.

A photo of Kailash Jhade, held by his family
Kailash is one of thousands of farmers who have taken their own lives

Unfortunately, for the families of the farmers who take their own lives, the tragic loss of sons, husbands and fathers is only the start of their problems.

Chandra Bhan's wife Rekha is angry with her dead husband.

"I'm very angry with him," she says. "I have to look after our two children, his old parents - and I have to pay his debt back."

Open market woes

Part of the problem is that the state government, too, is deep in the red.

Under pressure from India's World Trade Organization commitments and its own debts, it is getting rid of official subsidies - and announced in 2005 that it was no longer committed to procuring cotton from local farmers.

The effect was catastrophic. For the first time, local farmers had to sell on the open market.

Traders browbeat them into selling at much lower prices than the government rate of $60 a quintal (40kg) - and then often delayed payment for days.

We have started a drive against unlicensed money-lenders, and we are booking them
SPS Yadav, Nagpur police commissioner

The result was much lower incomes for farmers this year, and therefore high rates of debt default.


In all, the region's cotton growers have borrowed more than $880 million from banks.

And 90% of the farmers, Mr Tiwari warns, are now defaulters.

Based on ten years of keeping a "death register" of troubled farmers, he believes this year is the worst yet. "They have been driven to despair," he says.

Maharashtra's state government unveiled a $200m relief package in December - but many farmers have yet to receive any money, and those who do simply find that it is deducted from their debt.

The village of Linga
Whole villages are groaning under the pressure of debt

For many, the only way to repay debts is to take out new ones.

But with banks turning poor farmers away, the only recourse is the "sahukar", the village money-lender.

Interest rates vary, but go as high as 25%.

Repayment demands, many claim, are often accompanied by threats.

Not true, says one Vidarbha money-lender; the courts, rather than physical threats, suffice.


Even so, the police have started to take an interest in allegations of usury, says Nagpur police commissioner SPS Yadav.

"We have received complaints against money-lenders," he says.

"We have started a drive against unlicensed money-lenders, and we are booking them."

But Mr Tiwari says it's not a job for the police - but for the government, which to date has proved unwilling and ill-resourced when it comes to regulating the private money-lenders.

"If the government is serious it should fix private lending rate at 5% or 6%," he says. "It should bring in legislation on sahukars."

The only way out, he says, is for the state government to increase the rate of procurement to $70 a quintal.

Kishor Tiwari
Kishor Tiwari is trying to organise a farmers' movement

Subsidies for seeds and manure, he says, are also needed to counteract the sharp rise in input prices since genetically-modified seeds came on the market - one cause of the rise in farmers' debts.

Political dimension

In the meantime, farmers will have to keep going to money lenders. Until that happens, farmers will continue to be vulnerable to money lenders.

"We know how exploitative their interest rates are and we are aware they can get nasty if we don't return their money on time," says Bhagwan Shette, Vitobha Shette's brother.

"But we still go to them because the government doesn't help us."

The problem is not restricted to farmers in Maharashtra . More than 4,000 cotton growers in neighbouring Andhra Pradesh have already killed themselves, with similar cases being reported in Kerala too.

The problem has now acquired a political dimension.

Lal Krishna Advani, a veteran leader of India's main opposition Bharatiya Janata Party (BJP), demanded federal government intervention during a visit to Vidarbha in late April.

He also promised to ask for a Joint Parliamentary Committee on suicide cases.

Farmers have welcomed this announcement - but some point out that farmers were dying and killing themselves even during his party's regime.

Kishor Tiwari believes only a farmers' movement can save them. He has already started one on their behalf.

India's poor villagers wait in hope
01 Feb 06 |  South Asia

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