Tense future awaits farmers of Odisha as of every five farmers in the State two are in debt. What makes the situation more scary is the State’s farmers have borrowings disproportionately higher than the assets they have, when compared to with their counterparts nationally.
The recently-released National Sample Survey report on indebtedness brings to fore the ‘risky’ assessment of farmers here as it pointed that the debt-to-assets ratio of farmers in Odisha is 3.75 per cent against the national average of 2.4 per cent. This ratio hovers in the range of below 1 per cent to 2 per cent for neighbouring States like West Bengal, Chhattisgarh, Jharkhand, Madhya Pradesh and Bihar. Each indebted farmer household has a debt averaging to a whopping Rs64,120 when their annual average income is estimated at Rs59,712 only.
This home truth revealed by the NSS report where the average debt clocking up more than the annual income becomes the fertile cause of two farmer suicides in every five days in Odisha. The State witnessed more than 150 farmers’ suicides in 2014, and in January 2015, a single district has recorded four farmer suicides in a span of only ten days.
Another disconcerting trend noticed in Odisha is a significant chunk of around 5 per cent farmer households recorded incidence of indebtedness even though they have borrowed interest-free loans, which the NSS attributed to borrowings from friends and relatives. Notably, suicide-prone States like Telangana have the highest incidence of 13 per cent followed by Chhattisgarh and Odisha. Interestingly, the Odisha Government’s much-hyped low rate of interest (below 6%) on farm loans incidentally has the largest incidence (8%) of indebtedness followed by a high rate of interest (25%-30%) category, the sample survey has detailed.
Another interesting fact revealed by the NSS is that two in five farmers have no bank accounts (before the launch of the PM Jan-Dhan Yojana) in Odisha and a mere five per cent farmer households have the Kisan Credit Card (KCC). This brings to fore the lack of access to institutional credit for the State farmers. Moreover, the average amount of credit received by households per year under the KCC is only Rs12,070 against Rs56,000-92,000 in agriculturally-advanced States like Gujarat and Haryana. This aspect reflects the lower capital expenditure in farming in Odisha and the consequent lower productivity here.
Sample the Catch-22 situation of Odisha’s farmers. The Commission for Agriculture Costs and Prices (CACP) has estimated the 2014-15 operational cost of paddy production in Odisha at Rs1,032.97 and the total cost at Rs1,304.56 per quintal assuming a uniform yield rate of 32 quintals a hectare. But the Agriculture Department’s data show that around 10 districts in the State have a yield below 20 quintals and another three between 20 quintals and 25 quintals.
According to Prof Neeraj Kumar, lower productivity means higher cost of production, and quoting the labour bureau data that shows an abnormal spike in agricultural labour wages in Odisha by around 16 per cent since 2012 and around 250 per cent since 2009. The rise in fertiliser and other input costs could jack up the production cost much higher than the 2014-15 MSP of Rs1,360 announced for Odisha. Even the CACP in its note admitted that the actual cost of production in Odisha in 2012-13 has been 55 per cent higher than the MSP. Senior OUAT specialists roughly estimate the actual price at around Rs1,400-1,800 per quintal. The loss, the indebtedness and the risk are then clearly calculable, quipped Prof Kumar.
(The writer is a freelance journalist based in Odisha)