Punjab’s agricultural sector grew at 1.6 per cent during the 11th Plan against the national average of 3.41 per cent. The growth is tardy owing to near saturation in productivity. The rural debts in Punjab are estimated to be Rs 35,000 crore. The number of indebted rural households in Punjab is 66 per cent, third highest in the country after Andhra Pradesh and Tamil Nadu. The Government of India’s debt waiver scheme of 2008-09 failed to benefit state farmers as there are less number of small and marginal farmers and few loan defaulters in the state,” Punjab Finance Minister Parminder Singh Dhindsa said while announcing a first-of-its-kind allocation in the state budget presented this week — Rs 30 crore for suicide-hit families.
The Rs 2 lakh per family compensation will be distributed based on the report of a study commissioned by the government on farmer and farm labour suicides. But the report of the survey conducted by Punjabi University, Patiala; Punjab Agricultural University, Ludhiana; and Guru Nanak Dev University, Amritsar, shows the amount sanctioned in the budget may not be enough.
In its report submitted to the revenue department, PAU, which studied the six worst-affected districts of Bathinda, Sangrur, Mansa, Barnala, Ludhiana and Moga, has put the number of affected families at over 6,000 since 2000. The figure of other two universities is comparatively less, nearly 500, in the remaining districts. This report, more or less like a household census, will be the first authentic survey documenting the spate of suicides among farmers and agricultural workers.
But the Punjab government’s decision to fix a price for farmer suicides has triggered a controversy, with the opposition Congress questioning the rationale of fixing an outlay in the budget without citing the figure of suicide-hit families. “Are they saying just 1,500 families have witnessed farmer suicides, to put an allocation of Rs 30 crore in the budget. This defies logic and will encourage suicides. The government is not even utilising the money it receives under Centrally-sponsored schemes for the farm sector, while saying it is reeling under crisis. The only support for farm sector is coming as free power to farmers,” says Leader of the Opposition Sunil Jakhar.
Dhindsa says the allocation starting from this budget will be factored in every year depending on the criteria worked out by the revenue department, based on the findings of the study. But the government may have to do more than just allocate funds. The study of PAU has highlighted declining farm incomes as the main underlying cause for suicides. Senior economist Sukhpal Singh, who headed the PAU study, says there is a mismatch between input costs and the minimum support price for crops. “While the MSP grew by half to two-and-a-half per cent in last few years, the input cost has gone up by nine per cent. There is a seven per cent gap, which forces farmers to borrow at high interest rates,” he says.
On tackling rural debts, the Badal government has stonewalled the advice of its own advisory body, Punjab Farmers Commission, which has cited the system of payment to farmers through commission agents as a root cause of vicious debt cycle, saying agents pay farmers for their produce after deducting loans and interest calculated at rates much higher than market rates. But in the last five years, the government has shown little political will to usher in this reform owing to pressure from the powerful lobby of commission agents.
P S Rangi, senior consultant of the commission, says they had also recommended that the compensation not be paid in cash. “We had proposed that Rs 50,000 be paid as cash and the remaining Rs 1.5 lakh be converted into a fixed deposit in banks so that a family is able to get a monthly pension of Rs 1,500. Cash compensation can defeat the very purpose for which it is given; also Rs 2 lakh is barely enough,” he adds.
The Economic Survey too points out the woes of Punjab’s farms. It says productivity has stagnated in the absence of new breakthroughs in high yielding varieties and intensive farming regime has been at a huge cost in terms of depleted water table and degradation of the soil. “The wheat-paddy pattern is not sustainable and efforts to shift paddy to alternate crops is the need of the hour. At 242 kg per hectare, Punjab’s fertiliser consumption is one of the highest in the country. Post harvest infrastructure too needs to be developed to aid diversification efforts,” it adds.
Though government’s allocation for the sector for 2012-13 is 52 per cent higher than last year, at Rs 885 crore, it is far below the sector’s still high contribution to the Gross State Domestic Product of nearly 24 per cent. Moreover, a large part of the allocation will go into sustaining expenses of PAU, building a Kheti Bhawan to house offices of the agriculture department, leaving a meagre Rs 5 crore for diversification efforts. But it is the huge free power bill it foots for running the over 11 lakh tubewells that the government still cites as its most significant contribution to farmers. The budget pegged the power subsidy at over Rs 5,100 crore this year even as the Economic Survey said tubewells were digging deeper into the state’s already fast depleting water table.