Re: [nukkad] Farmers' suicide

["Indian Rediff" <>]

I think the fundamental reason for this malaise is being missed.

Unfortunately, I don't have the exact statistics to back up my
argument. I have dredged up some from www.worldbank.org and noted the
following:
India: 60.8% of 2.2 million sq km is the land unuder cultivation
           Population is 1.1 billion
US: 45% of 9.6 million sq km is the land under cultivation
        Population is 300 million

My guesses: 40% of Indian population is directly engaged in farming
and 10% of US population is engaged directly in farming. I think the
percentage for India is higher and am almost sure that the percentage
for US is around 3% - but I am purposely underestimating and
overestimating respectively.

What we can get from this data is that theapprox land under
cultivation per person in India is approx 4500 sq metres and in the US
is 144000 sq metres.

Let us not worry about the exactl numbers. What is revealing is that
the US farmer has approximately 30 times the land under cultivation as
compared to the Indian farmer. This number may be 40 times or 25 times
- but the real point is this.

All other things being equal, after grossly over simplifying across
the board, the US farmer can make 30 times the amount of money that an
India farmer can.

Of course, because of the efficiencies of using large machines, you
can expect the US farmer to be making at least 10 times more money
(scaling factor of 1 machine - 10 people after taking care of costs of
1 machine v/s 10 people). That makes it 300 times more money. Hence
more efficient. Hence more productive.

Looking through this general lens, you can see that, in general,
Indian farmers have smaller plots of land per head. I am sure that if
you take into account the larger tracts of land that are
professionally managed in Punjab and the more fertile parts of India,
the plots of land per farmer will be reduced even further.

Since I have used total population, this will skew things more in
favour of the US if we take into account the larger families in India
and look at land under cultivation per family.

Another thing to remember is that fertiliser use is higher in the US
and the number of crops per year that can be grown is higher in India.
Also, water availability is stupendously higher in the US, compared to
the Indian dependence on the monsoons.

Those that have read so far might be wondering what in the world is
Sai talking about?

In a country like India, when you are farming a given tract of land,
you need to grow enough to sell so that there is enough money to feed
you and your family the rest of the year. You can reduce the amount to
be sold, if some of the stuff grown can be used to feed the family.
However this cannot be used to 0 because you always need some money
for clothing, fertilisers and other things that need to be bought with
real money.

If a farmer is able to turn around 2 crops a year from his tract of
land, and is fully dependent on both of them being successful in order
to survive till the next year, is setting himself up for a disaster. A
crop is bound to fail - and this will start the inevitable slide down
to the money-lender and usurious rates of interest. Once the farmer
borrows money from the money-lender, there is almost no way for him to
come out of debt - so high are the interest rates.

The danger of smaller tracts of land is compounded by the fact that
when land is divided among the next generation, they are bound to get
smaller and less efficient.

In the case of the US farmer, the reasons for success are obvious.

So what is the solution, you may ask.

The solution is for farmers in India to sell their land and move
toward urban areas in search of other forms of employment. Inbrief,
large farms will survive. Smaller farms will be forced to die. This is
an economic reality - and has nothing to do with globalisation. This
was bound to happen because of industrialisation.

People might talk about the whole thing being the fault of the
money-lender. Actually he isn't to blame. He is only charging enough
of an interest rate to counter the risks that he is taking. If a bank
were to come up with a model that would allow it to charge as per the
risks they were taking, I am sure their rates would be similar to that
of the money-lender. So asking banks to be more considerate is NOT the
correct solution.

This was a rather long and detailed e-mail. I hope at least one person
has the patience to read it - since one person typed it in ;-)

Sai


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Love is an ideal thing, marriage a real thing; a confusion of the real 
with the ideal never goes unpunished. -- Goethe
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