Debating India


A case for moratorium


Friday 2 July 2004, by SRIDHAR*V.

Interview with B.V. Raghavalu, CPI(M) State secretary.

B.V. Raghavalu, secretary of the Andhra Pradesh State Committee of the Communist Party of India (Marxist), argues for an immediate moratorium on debt repayments by farmers. He points out that this is the surest way of stemming the tide of suicides in the State. However, the Congress government is vacillating on the issue because it is afraid of alienating the neo-rich who have gained a stranglehold on rural life in the past 10-15 years, he says. Excerpts from an interview he gave V. Sridhar:

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Suicides by peasants have been reported since 1987. What is significant about the spate of suicides in the past few weeks?

Suicides are being reported from across the State, from almost all the districts. Previously, such deaths were confined to a few districts - Anantapur, Mahbubnagar, Warangal and Nalgonda - basically the drier parts of the State or to peasants growing a particular crop, for instance, cotton or chilli. Now, suicides are being reported from even the Krishna and Godavari delta areas. This shows that the agrarian crisis has intensified and extended throughout the State.

What led to this situation?

In the past two to three years droughts have occurred throughout the State. The Krishna delta has also been affected severely by poor flows in the river. Peasants lost heavily after making investments in the past two years. This has never happened on this scale in the last 50 years. In coastal areas, tenant cultivation is rampant. Such peasants have been severely affected by debts. They pay very high rents and the landlords insist on payment of rent immediately after the harvest. Tenants borrow mostly from moneylenders. The Telugu Desam Party government did not recognise the seriousness of the problem.

How far is the lack of water responsible for the plight of the peasantry?

This grim situation is only partly because of the problem of water scarcity. The previous government blamed the rain god for the peasants’ problems. But there is human failure on a massive scale, which has aggravated the problem. The government could have helped the farmer to raise a different set of crops in the context of the drought. It could have reduced the tenants’ burden by providing loans to them. Instead, it egged the peasantry on to grow crops for which the land was not suitable. It made false promises to the peasantry.

How has the commercialisation of agriculture affected different strata of peasantry in the State?

During the past decade, because of the policies of the State and Central governments, nearly eight to nine lakh pumpsets have been installed in the State. Meanwhile, power tariffs have been increased drastically. The water table has also fallen sharply in the dry parts of the State. The cropping pattern has changed. Earlier, millets were grown by peasants for their personal consumption. Now, they grow cotton, sugarcane, mustard, castor and vegetables. The commercialisation of agriculture and the change in cropping pattern have forced the peasants to depend on the market. Output prices fluctuate a lot now. In the past five years, prices of every single crop suffered a collapse. Meanwhile, input costs have increased sharply. Credit released by institutional sources failed to provide the cushion that the peasants desperately needed. They are forced to borrow from private moneylenders.

How were tenant cultivators affected? How have conditions of tenure changed in the last decade?

The extent of tenancy has also increased sharply during the last 10 to 15 years. They are not protected by the State. There are many reasons for the increase in tenancy. Most of the rich peasants and landlords, holding between 15 and 30 acres, migrated to urban areas and their children even went abroad. Most of the land went into the hands of neo-rich peasants, who emerged during the last decade. This section prefers to lease out the land and charge exorbitant rents. In many parts of the delta areas, as much as 80 per cent of the land is leased out. This has happened in the dry areas also, like in parts of Telangana and Rayalseema. In Telengana, because of the extremist activity of the People’s War, sections of the rich peasantry have migrated to urban areas and leased their land. Tenants are also increasingly cultivating commercial crops and have been exposed to market fluctuations. The change in agrarian relations in the last 10 to 15 years has also added to the problems faced by poor peasants on account of commercialisation of agriculture. The rising number of suicides is nothing but the result of the cumulative burden that poor peasants have had to shoulder as a result of these changes in rural Andhra Pradesh.

How does moneylending fit into this picture of agrarian relations?

A decade ago, the rural elite consisted of a "trinity" - the landlord, the supplier of inputs and the traders who purchased the output from the peasant. These three would combine to exploit the peasantry. Now, exploitation has taken a different form. The rich peasants, who have leased out the land, have migrated to the mandal headquarters. There they have set up shops to sell seeds, fertilizers, pesticides and other inputs to the peasant. In return, the peasant mortgages his output to them. Thus, a single entity in the rural economy now controls the land, and has interests in the markets for inputs, credit and output. These new entrepreneurs now also control the business of politics.

The neo-rich - they are very different from the old type of moneylenders - have become powerful. They constituted the main base of the TDP. But they may change their loyalties now.

How do you think the new government should handle the deep-rooted agrarian crisis?

The rate of suicides in the State increased sharply after the new government assumed office. Some attributed the spurt to the package announced for families of those who had committed suicide. They have implied that the peasants committed suicide so that their families could take advantage of the package. My point is that the peasant was already heavily burdened and did not see any hope on the horizon. The incentive package could at best have been the last straw on the camel’s back.

The government did not address the problem in a comprehensive manner. It only gave attention to those who had already committed suicide. It ignored the fact that every small and marginal farmer in the State is a potential suicide victim.

What are the immediate steps that are needed?

The government should have immediately announced some kind of moratorium on repayment of loans by peasants. The government wavered on this. Although the Chief Minister mentioned a six-month moratorium, there has been no follow-up action on the matter. The powerful neo-rich section exerts a tremendous pressure on the government, preventing it from taking the measures that will provide relief to the peasantry. The government says that it does not want to hurt the small moneylenders. But that is only an excuse to protect the big moneylenders. There can be ways to protect small lenders. For instance, those who have lent up to Rs.10,000 can be outside the purview of the moratorium. But the government is using the small lender as an alibi for not announcing a moratorium.

The government is also not taking measures that found a place in the provisions of the Rural Indebtedness (Debt Relief) Act, which has lapsed. The Act was in force between 1979 and 1989. The legislation empowered the government to announce a two-year moratorium on debts of farmers, irrespective of whether the money was borrowed from public or private sources. Those applying pressure on borrowers could be prosecuted under the Act. The Act had to be renewed every two years by the government, but it lapsed in 1989. If the Act is invoked, it will prevent the harassment of the peasantry. The easiest and fastest way to provide relief to the peasantry would be to invoke the legislation. But these solutions to the problem impinge on the interests of the neo-rich, who are also active in both the main political parties in the State, the Congress and the TDP. The intentions of the government may be good, but it also has to reckon with the powerful lobbies of the rich at work. That explains the procrastination of the government on the issue of declaring a moratorium.

See online : Frontline


in Frontline, volume 21, Issue 13, Jun. 19 - Jul. 02, 2004.

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