Farmer's suicides, a charged political issue, received a lot of attention again at the recently concluded Congress conclave. But standard political solutions are typically not informed by basic economic logic. The reasons farmers are committing suicide are actually not varied; a same or similar set of factors are involved in tragedies around the country.

The first has to do with the riskiness of farming. Environmental, biological and economic risks are quite high. This is especially so for farmers who are forward-looking and are more ready to invest in productivity increasing and expensive inputs such as seeds, fertilisers and pesticides. The availability of secured credit now enables even the small farmer to benefit from these productivity and income increasing inputs. In traditional modes of agriculture one could obtain seeds, manure and other inputs at low, or even zero, costs. And therefore, though returns were low, the risk was also low. But with the newer and costlier technologies that is not the case. This is true of a wide range of agri-commodities, whether it is cotton and its high requirement for pesticides, or foodgrains and great dependence on fertilisers, and so on.

It is sometimes thought that only the small, underprivileged farmer suffers from this problem. To the contrary, the farmer who invests in greater productivity inputs could be small or large; in fact most of the suicides are reportedly from farmers who are quite literate. A Tata Institute of Social Sciences study in Maharashtra found that of the 644 cases studied more than four-fifths were literate. This is not surprising, as the farmer who purchases the costlier high-productivity inputs tends to be the more forward-looking one. In other words, the farmers who are most affected negatively are precisely the ‘new’ farmers that agriculture policy has been trying to create and support.

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