The idle ramblings of a Jack of some trades, Master of none

Oct 9, 2007

Farmer Suicides

There are differences: India is indigent and has too many people, Australia is prosperous and is underpopulated; both have booming economies that are bypassing some of their people. There are similarities: both countries suffer from agricultural problems, and reel from water scarcity. The result is the same: farmer suicides in these two disparate countries are among the highest in the world.

About a year ago, news articles started to appear in the Western press about Australian farmers taking their own lives. They had been faced with several consecutive years of drought. This year, it was far worse. Rain fell for the first time in May after an eleven-year-long dry period. Farmers planted their wheat, and encouraged by forecasts of favourable precipitation in September, sold up to a third of their harvest on the futures exchanges.

The rains didn't show, contrary to the bullish predictions by the Australian Meteorological Bureau. Wheat prices, in the interim, have doubled. The futures mature in December and the farmers have to find the money to buy the wheat on the open market to cover their bets. Ruin stares many of them in the face.

The Australian federal government is attempting a rescue, paying up to 150 thousand dollars to the farmers hit worst. In this, of course, they show a vast difference from their Indian counterparts. But the suicides, sadly, have continued.

A study by Siddhartha Mitra (Gokhale Institute of Politics and Economics, Pune) discusses reasons for the high suicide rates in the two countries. In India, lobbying causes diversion of scarce water resources to those with greater political clout (e.g. the sugarcane producers in Maharashtra outdo the cotton growers in Vidarbha). There is no safety net for farmers hit either by heavy debt servicing burdens, or falling commodity prices. These are the prime causes of suicide in the rural areas. In Australia, climate change causes most of the agricultural problems, but added to mix are social problems: shrinking farm employment, a high male to female sex-ratio outside the cities, higher divorce and separation rates, all of which cause increasing numbers of rural males to commit suicide.


Anonymous said...

I thought your overview of the pains farmers are experiencing both here and in Austrlia was solid and succinct.

For me, I feel there is now a question, what can we do? As consumers? As citizens of these countires? As politically active people?

Fëanor said...

Stottpot: it's a little difficult for me to claim any expertise in this matter. Unfortunately, if even rich Australia finds it difficult to succour its farmers, what hope do we have in India? Surely it would be prohibitive to have a financial cushion for every indigent farmer. Even if we bring in the capital markets into the fray, insurance premia might be unaffordable. Possibly we might ask farmers in areas with water shortages to switch to crops that can survive under these circumstances, but what if the prices for such crops are not high enough to justify the shift?

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