If you are from India or at least you follow the happenings from India, it’s likely that you heard of Indian farmers committing suicides. Have you ever think of the reason? The reason you may give is that their financial status has been in distress. That’s right. But do you know how bad it is really? Let’s dig into some numbers and know the facts.

For analyzing the facts, let’s consider simple growth metrics of a country – GDP (Gross Domestic Product) and Income-Per-Capita. If you are unfamiliar with these terms, here is a brief explanation. GDP is the cumulative productivity of a country in a year’s time. That means it’s the total income, a country (its workforce) earns in a year. Income-per-capita is GDP divided by population. That means it’s the income person person in the country on average.

In 1990 agriculture’s share in GDP was 31%. In 2011, it fell down to 16%. That means in about twenty years, agriculture lost half of its share in GDP. In 2011, nearly 52% of Indian workforce was dependent on agriculture, which is almost same as it was in 1990. In other words, 52% people are earning only 16% of the GDP where as the remaining 48% workforce, who is non-farmers, is earning 84% of the GDP. That means, income-per-capita of non-farmers is more than 5 times of the income-per-capita of farmers. In other words, farmers are earning 70% less than the nation’s average income-per-capita. For every rupee (dollar) that a non-farmer Indian is earning, a farmer is earning less than 20 paisa (cents). That shows how bad the farmers are doing.

The future for farmers doesn’t look bright either. In 2011-12, Indian GDP is projected to grow at 6.4% where as agriculture is expected to grow only by 3%. On the other hand, food inflation has risen to 12% in 2011. That means if you bought a kilo tomatoes for 10 Rupees in 2010, it would have cost you 11.20 Rupees in 2011. Though there was growth in food prices, the growth is not reaching the end producers – the farmers. Recently you might have heard of Indian government’s decision to allow Foreign Direct Investments into multi-brand retail sector (currently the decision has been put on hold because of the opposition government faced in parliament). This change would have allowed foreign companies to invest up to 51% which is a crucial number to take over the decision making capabilities. If this happens, it would not be a boon to farmers, primarily for one reason. Currently farmers have better negotiation power with the traditional retailers to get better prices to their products. If this law comes into force, then foreign companies would follow the same strategy they have been following elsewhere in the World. If you ask farmers,  in countries like USA, you may not hear much positive opinions about the big retail chains and their pricing policies. These chains make long term contracts with farmers which are less profitable to farmers. As the chains enter the market, it’s likely that traditional retailers will be forced to go out of business because of the fierce competition. As a result, farmers have to agree for the highly restricted contracts from chain retailers or they won’t find a buyer to their products. Hope this law will never be approved. Of course, same effects can be created by the domestic chain retail stores. However, we haven’t seen this trend yet.

Now, do you want to do something to make their lives better? Probably there is not much that we can do except for small help here and there. When you go to shop groceries in India, try to buy from Raithu Bazars (Farmers Markets) instead of buying from a grocery store chain. If you are one of those who don’t think twice before spending 5,000 Rupees on a branded dress or 2000 rupees on a dinner, then don’t bargain with the farmers for 5 rupees on a Kilo tomatoes. Be compassionate to farmers wherever and whenever you can. Hope and wish that Indian government’s decision to allow  FDI into retail business would never materialize.

Since 1997, nearly 2,00,000 (2 lac) farmers have committed suicide. Still every year, more than 17,000 farmers are killing themselves. Despite all these setbacks, still more than 50% of Indian workforce is in agriculture which hasn’t changed in last 20 years. That shows their commitment to their profession. Today, India is the largest rice producer, second largest wheat producer, only after China. India is the second largest in world agricultural output after China. India’s share in world’s agricultural output is more than 8% in 2011. It’s NOT just Cricketers who are bringing glory to India and Indians. It’s farmers too. Hats off to Indian farmers !!!!

References:

http://en.wikipedia.org/wiki/Agriculture#List_of_countries_by_agricultural_output

http://en.wikipedia.org/wiki/Agriculture_in_India