Friday, September 26, 2008

Never too late to cover up! On the Narendra Jadhav Report

R. Ramakumar

Nothing serves better than a friendly government committee to cover up damaging facts. The Maharashtra government’s recent effort to evaluate the relief measures announced for the Vidarbha region bears out, yet again, this tired cliché.

In November 2007, the Government of Maharashtra appointed a one-member committee headed by Dr Narendra Jadhav (Vice-Chancellor, University of Pune) to evaluate the progress of its own Rs 1075 crore package for the six districts of Western Vidarbha as well as the Prime Ministers’ Rs 3750 crore package for Vidarbha. Later, its terms of reference were enlarged to include a study of the debt waiver scheme announced in the Union Budget 2008-09. The report was submitted to the government in July 2008.

What prompts this response to the report is not any extraordinary argument in the report but a smart effort on the part of Dr Jadhav to undertake a personalized attack on journalists and provoke a narrow regional sentiment against them. In his report, Dr Jadhav took umbrage to journalist P. Sainath’s alleged claim that Maharashtra is a “graveyard of farmers”; he wrote that “Sainath is not only incorrect and misleading, but grossly unfair to Maharashtra.” He followed this up with a statement at a public lecture in the University of Mumbai where the Mumbai Mirror quoted him as saying, “Sainath has unwittingly or otherwise used wrong parameters to defame the state and has migrated from truth. This cannot be condoned. It’s irresponsible.”

It is the above statement of Dr Jadhav that necessitates a rejoinder. Dr Jadhav’s argument has much potential to encourage regional chauvinists, available aplenty in the State, to fish in muddy waters.

In brief, there are at least three serious problems in Dr Jadhav’s report.

(a) The great suicide debate - What is Maharashtra’s rank from below?

In his report, Dr Jadhav spends much time and space to prove that Maharashtra is not the “worst possible State” in India with respect to farmers’ suicides. He cunningly accepts upfront that farmers’ suicides are matter of great concern, and to deny it would be “symptomatic of social insensitivities.” He then proceeds to disagree with “the other extreme”. Rubbishing the alleged claim by Sainath that Maharashtra is a “graveyard of farmers”, he claims that the use of absolute number of suicides for inter-State comparison is “inappropriate”. When “appropriately analysed”, it turns out that the rate of farmers’ suicides in Maharashtra is less than that of Goa, Pondicherry, Karnataka and Kerala.

What is interesting here is that it was not Sainath’s claim that Maharashtra is a “graveyard of farmers”. Sainath was only quoting from a widely acclaimed report on farmers’ suicides by the eminent economist Professor K. Nagaraj (see page 21 of Nagaraj’s report, available at Nagaraj does not base his argument on just one indicator – the absolute number of farmers’ suicides. He also considers (b) farmers’ suicides as a share of all suicides in the State; (c) farmers’ suicides in each State as a share of all suicides in the country; and (d) suicide rate per 100,000 cultivators. It is based on a comprehensive analysis of all these indicators that Nagaraj arrives at his conclusions. All the data in Nagaraj’s report are for 2001, as it is the last year for which census data on cultivators are available.

Let us take each indicator. First, as Table 1 shows, the absolute number of farmers’ suicides in Maharashtra in 2001 was 3,536, which was the highest for any State in India. Dr Jadhav’s “appropriately” more distressed States – Goa and Pondicherry – had just 91 and 18 farmers’ suicides respectively that year. Secondly, the share of farmers’ suicides among all suicides was 24.2 per cent in Maharashtra, which was only second after Chhattisgarh (Table 1).

Thirdly, when the suicide rate was considered, Maharashtra indeed came behind Goa, Pondicherry, Karnataka and Kerala in 2001. This is the indicator from Nagaraj’s report that Dr Jadhav has conveniently and arbitrarily chosen to use as the most “scientific” and decisive. Goa and Pondicherry are hardly agrarian societies to be compared “scientifically” with Maharashtra. In the 10 years between 1997 and 2006, the total number of farmers’ suicides in these two States was 103 and 1206 respectively, compared to 33,364 in Maharashtra. Kerala showed a high suicide rate of 143 per 100,000 cultivators, but this is a wrong estimate. According to the Census of India definition, a person can be classified as a cultivator only on the basis of the crops grown by that person. Persons who grow “plantation crops” like tea, coffee, rubber, tobacco, pepper, and cardamom, and other crops like coconut, spices and betel nuts are not considered as “cultivators” in the Census. Farmers’ suicides in Kerala were largely by growers of crops that are not considered while defining a “cultivator”. In other words, the abnormally high suicide rate for Kerala is due to the use of a denominator that does not include the population of farmers who committed suicide. Thus, in 2001, Maharashtra is likely to have been second only to Karnataka in terms of suicide rate.

Thus, in 2001, Maharashtra came first in terms of the absolute number of suicides and second in terms of the share of farmers’ suicides among all suicides and the suicide rate. This was the position as in 2001.

Post-2001, it is very likely that Maharashtra’s position worsened vis-à-vis other States. The number of farmers’ suicides in Maharashtra increased rapidly after 2001. Between 2001 and 2006, the annual number of farmers’ suicides in Maharashtra increased by 26 per cent – from 3536 in 2001 to 4453 in 2006. On the other hand, the annual number of farmers’ suicides declined in absolute terms in the other four States that Dr Jadhav notes to be worse than Maharashtra in 2001. If we take Goa, Pondicherry, Kerala and Karnataka together, the annual number of farmers’ suicides actually fell in absolute terms by 17 per cent.

If we take the longer period between 1997 and 2006, the annual number of farmers’ suicides in Maharashtra more than doubled – from 1,917 to 4,453 (see Table 2). In the same period, the annual number of farmers’ suicides in the other four States taken together fell from 3089 in 1997 to 3024 in 2006. As a share of all suicides in the State, farmers’ suicides in Maharashtra increased from 15 per cent in 1997 to 29 per cent in 2006. The number of farmers’ suicides in Maharashtra as a share of farmers’ suicides in India as a whole rose from 14 per cent in 1997 to 26 per cent in 2006. As Nagaraj comments, “there is no other State in the country that shares all these dubious distinctions with Maharashtra.”

A word of caution: State-level data used here are for Maharashtra as a whole. If one considers only the districts in Western Vidarbha affected by the suicides, the picture that emerges is starker. For instance, in Wardha district, the number of farmers’ suicides as a share of all suicides in the district was 43 per cent in 2006, as compared to 29 per cent for the State as a whole (as per data provided to me by Dr R. Rukmani of MSSRF, Chennai).

As we have noted, after 2001, farmers’ suicides have risen in Maharashtra at a rate faster than in other States. If one considers this rapid growth of farmers’ suicides, it is likely that Maharashtra has moved up the list in terms of many indicators that Nagaraj examined. As Nagaraj concluded:

"This gives an annual compound growth rate of an exceedingly high figure of 9.8 per cent for farm suicides here, a rate at which the number would double every 7-8 years. Considering the period 1997-2006 as a whole, every fifth farm suicide committed in the country during this period occurred in Maharashtra; for the latest year, i.e., 2006 this figure is even more stark: every fourth farm suicide in the country occurred here in that year. And if we look at male farm suicides in this State, the picture is even bleaker: this number increased at an astounding annual compound growth rate of 11 percent between 1997 and 2006, which would imply a doubling of the number every 6-7 years. Maharashtra, it appears, is the graveyard of farmers today" (2008, pp. 20-21, emphasis mine).

Unfortunately, Dr Jadhav has chosen to take the above remark out of its context and use it for a narrow and personalized accusation. Dr Jadhav makes a grave mistake by confusing between the criticism of a government and that of the State and its people. After reading the comment by Dr Jadhav, the following was the response from Nagaraj in a personal communication:

"…when we point out that Maharashtra is the graveyard of the farmers, it goes without saying that it is no reflection on the farmers of the State or the people of the State. It is just a reflection of the fact that the neo-liberal economic policies – pursued with vigour by Centre and the State – have had the most severe impact on farmers in Maharashtra. Blaming the victims was not part of our agenda; blaming the villains certainly was."

(b) What are the “root causes”?

After “proving” that Maharashtra is not the “worst possible State”, Dr Jadhav moves on to analyse what he calls “the root cause behind the suicides”. According to him, there are three root causes that have led to the non-viability of farming in Vidarbha: (1) grossly inadequate irrigation facilities; (2) acute shortage of electric pump-set connections; and (3) inadequate supply of institutional credit.

Interestingly, in identifying the “root causes”, Dr Jadhav refuses to criticize the policies of economic reform that are the proximate cause of the agrarian distress and farmers’ suicides. Instead, at one point, he claims that the crisis in agriculture is a result of inadequate liberalisation in agriculture. He writes: “the agriculture sector in India has remained largely insulated from the comprehensive reforms initiated in the aftermath of the unprecedented macroeconomic crisis of 1991.” The falling growth rate in agriculture in the 1990s in India, then, is an “inevitable” consequence of this lack of reforms in agriculture.

It is well-documented that the real reasons for the non-viability of cotton cultivation are the fall in cotton prices and rise in input prices; interestingly, Dr Jadhav does not consider either as important. Cotton prices fell primarily because cheap imports of cotton flooded the Indian market after the activation of the WTO agreement. Post-1997, the central government eliminated quantitative import restrictions for cotton, and reduced import tariffs from 35 percent in 2001-02 to 5 percent in 2002-03. Earlier falls in prices were not fully felt by the farmers because losses were absorbed largely by the ‘Monopoly Cotton Procurement Scheme’. However, from the late-1990s, the State government began to dismantle the procurement scheme. The withdrawal of the scheme rendered cotton farmers totally susceptible to volatilities in international and national prices.

Further, the 1990s and 2000s have been a period of breakdown of institutional support structures in rural areas. Input costs have exhibited a sharp rise after a reduction in subsidies. The rise in the input costs is reflected in the rising bills for electricity, fertilisers, energy (diesel) and transportation. Given the declining public investment in agricultural extension, farmers have lost access to the public extension. In its place, the farmers are dependent on agents of seed, fertiliser and pesticide companies – a dependence that has attained disastrous dimensions in the suicide-stricken regions like Vidarbha.

Dr Jadhav does not discuss any of these factors as consequences of economic reform. Instead, he has chosen to list a set of factors as “root causes” in such a way that they would appear unconnected to fiscal compression, which is central to economic reforms. Compare Dr Jadhav’s position with the more forthright position in the recently submitted report of the Radhakrishna Committee in 2007:


"The crisis in agriculture was well under way by late 1980s and the economic reforms beginning with 1990s have deepened it. The crisis in agriculture in the post-reform period has become pervasive…The volatile prices of commercial crops, including certain plantation crops, often triggered by cheap imports have caused farmers to suffer ruination because of agricultural trade liberalisation…"

"Internally, the structural adjustment process had far reaching implications for Indian agriculture. Fiscal reforms adversely affected the agricultural input support system and institutions…Simultaneously, a drastic reduction took place in the share of developmental expenditure on rural development from 11.7 per cent of GDP in 19991-92 to 5.9 per cent in 2000-01…"

"Marginal and small farmers are increasingly finding that their holdings are not viable…The market driven liberalisation process in agriculture is bound to be strongly biased towards rich farmers, traders and prosperous regions…"

"The root cause of the agricultural crisis lies in the neglect of agriculture in designing development programmes and in the allocation of development and plan resources" (Radhakrishna Committee Report, 2008, emphasis mine).


Clearly, there is a world of difference between the “root causes” identified by the Radhakrishna Committee and by Dr Jadhav. If only Dr Jadhav had shed his pro-reform bias and was equally forthright in identifying the reasons for the distress, one would have had a more meaningful report in hand.

(c) How efficient was the implementation of relief packages?

Dr Jadhav is full of praise for the design and implementation of the two relief packages by the government. The report notes that “the speed of implementation of both packages is certainly satisfactory”. The minor lapses are portrayed as primarily due to “administrative shortcomings.” Further, he claims that many of the perceived shortcomings of the packages are because of the “failure of government machinery” in “creating proper awareness among farmers” and giving it “necessary publicity”. The report notes:

"Assuming a uniform rate of implementation, around 58 per cent implementation [of the PM’s package] could have been expected. In reality, the implementation was more than 75 per cent. Likewise, the State Government’s three year package had completed 28 months by April 2008, which means that about 78 per cent implementation should have been completed. In reality, the implementation by April 2008 was more than 98 per cent."

It is unclear what indicator Dr Jadhav has used to arrive at this conclusion. If it is the “amount spent”, then it certainly is a dubious indicator to evaluate a scheme. In showering such praise on the State governments’ role, Dr Jadhav conveniently chose not to use the recent report from the Comptroller and Auditor General (CAG), which examined the progress of the two relief packages in Maharashtra. In a rather scathing remark, the CAG report had noted that there was an

"…increase in number of suicides in six districts despite the declaration of the packages. The average number of suicides in the first two quarters of 2007-08 declined marginally compared to the respective quarter of previous year, yet the numbers were significantly higher than the number of suicides in corresponding quarters of the years 2001-02 to 2005-06" (Report of the CAG of India, “Performance Audit of Farmers’ Packages, 2008, pp. 17-18).

The other major conclusions in the CAG report may be summarized as below:

a) Base-line data obtained by door-to-door survey conducted by the Revenue department to ascertain the level of distress amongst farmers was not shared with other departments for identification of beneficiaries;

b) Out of the 14 components of the GoM package (Rs 1,075 crore), four components involving allocation of Rs 564 crore were not specific for the six suicide-prone districts and were being implemented in all districts of the State. This was incorrect accounting of expenditure;

c) While reimbursing banks for interest waived on loans, no fresh loans were sanctioned for 4.45 lakh households;

d) No expenditure was incurred on the heading “Ban on illegal money lending” (a court ruling was cited by the government as a reason);

e) There were delays ranging from 10 to 323 days in payment of immediate relief assistance in suicide cases; many cheques were dishonoured.

There is a clear hiatus between the claims of Dr Jadhav and the conclusions of the CAG. The CAG report had regretted that the implementation of the packages “does not inspire confidence”. Nevertheless, Dr Jadhav claims that the implementation was “certainly satisfactory.” One is tempted to believe that Dr Jadhav has gone out of his way to praise the governments’ role vis-à-vis the relief packages.

* * *

To conclude, the Narendra Jadhav Committee would appear to have achieved the purpose for which it was set up. First, it makes a valiant effort to whitewash the appalling record of the Maharashtra government in pushing its farmers to suicide; for this purpose, it runs the extra mile to selectively present data that suits the government. Secondly, it trivializes the central role that economic reforms have played in perpetuating the non-viability of Maharashtra’s agriculture. Thirdly, in an election-year, it provides a good service-certificate for a government known more for its absence in rural areas than presence. Never too late to cover up!