Cotton prices wrecking Indian Farmers
Posted by Ramoo on February 20, 2007
By B. GAUTAM
Special to The Japan Times
MADRAS, India — The western Indian state of Maharashtra, whose capital is the nation’s financial capital Bombay, has made great strides in lifting cotton production. Land dedicated to growing cotton increased from 92,000 hectares in 2003 to 480,000 hectares in 2004, according to government sources.
As more and more land continues to be planted in cotton, India has now joined the list of “biotech” mega-nations (those growing at least 50,000 hectares of biotech crop) — along with the United States, Argentina, Canada, Brazil, China, Paraguay and South Africa.
Yet there is no sign of farmer suicides abating. In January alone, 62 farmers took their lives, and the state government says some 3,000 farmers have killed themselves in the past three years.
Maharashtra’s farmers underscore the most painful example of India’s agrarian crisis. Underlying this tragedy is an irony: India heads a group of more than 40 poor countries represented in the now stalled Doha Round of World Trade Organization talks, and New Delhi has been trying very hard to protect its farmers from foreign competition.
Studies conducted in India reveal that the plight of the cotton farmers has worsened because they have been forced into an unfair global trading system. Hoping that “modern” farming techniques would help them integrate better with globalization, farmers bought expensive “biotech” cotton seeds that were ill-suited for their small plots, traditionally irrigated with rainwater. Most farmers in Maharashtra have small holdings.
In a ripple effect, farmers thought they could sink deep wells and depend less on the monsoon for water. But when the price of diesel fuel to operating well pumps shot up, many farmers found themselves deep in the hole.
Added to this, farmers had taken out high-interest loans to sink the wells and buy the pumps and biotech seeds in the first place. They have struggled just to pay the interest on these loans.
More misery was to be found in the “global village” as the price of cotton fell. It has dropped by more than a third since 1994. Last year, the Maharashtra government cut the minimum support price for 100 kg of cotton from 2,000 to 1,750 rupees. World prices are falling because cotton is heavily subsidized by rich nations, especially the U.S.
According to the World Bank: “The Doha round aims to cut these handouts ambitiously and expeditiously. If they were cut completely, it might add about 13 percent to world prices. But the Doha round is unlikely to reach such an accord soon. A more likely scenario, in which cotton subsidies are cut by a third (and export subsidies eliminated), would add less than 5 percent to the price.”
India’s textile mills are happy with the decline in cotton prices. They are making hay amid the farmers’ misery. In fact, the prices of cotton garments and related goods have not come down at all.
At one time, British colonizers forced Indian cotton farmers to sell their produce at nonviable prices to feed the Lancashire cotton mills. This ruined the farmers as it did many weavers left without yarn to work with. Everything was being shipped to Britain.
In what seems like a stopgap measure to tackle the contemporary crisis, the Maharashtra government has delivered a relief package that includes 50 billion rupees (more than $ 1 billion) in direct aid. But this is chicken feed in light of the number farmers in debt: 1.2 million, along with their families, are considered in bad shape. Sadly, many see no choice but to hang themselves — this in what is still largely an agrarian country.
B. Gautam writes for a leading Indian newspaper.
The Japan Times
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