Vines of Debt

Onion or grape farmers of Nashik in north Maharashtra have very little to choose to escape debt, and now death.

in Nashik, Maharashtra

Pandurang Kadam’s daughter-in-law Sunita with her children. Burdened by debt, Pandurang set himself on fire in the Lasalgaon market yard. Photo: Dionne Bunsha

While writing out the receipt for Pandurang Kadam’s onion crop, the trader didn’t realise that it would be forensic evidence. The next day, 20 April 2006, Pandurang returned to the Lasalgaon market and set himself on fire. The town watched shocked as Pandurang burned in the yard where a thousand farmers’ hopes are extinguished everyday. In his pocket, they recovered the receipt. Behind it, Pandurang had written his last words.

“The co-operative society bank’s Rs 23,500 still remains. Electricity bill Rs 4,000-5,000. Ashok Rs 3,000, Champalal Rs 1,000. All the onions went for Rs 151 (per quintal). I could not pay back the loans. My prayer to the state and centre is that farmers must get a price of Rs 300-400. With this prayer, I end my life’s journey.”

It was the harvest season, and Pandurang (60) went to the market hoping this year would be different. But it wasn’t. He wasn’t able to make up the last two years’ losses on his one-acre farm. “The market price was too low for him to recover any of the costs,” says Sunita Kadam, his daughter-in-law in Somthan Desh village. “He had sold one bullock, the cart and even the tractor. But even that wasn’t enough.”

Driving through the lush green fields of Nashik, no one would imagine that farmers here are in the red. The hilly landscape is lined with leafy grape vines reaching up to touch the sky. Lasalgaon is one of the largest markets for onions in Asia. Nashik district is one of the more developed districts in Maharashtra — called India’s California. But here, dreams have soured as prices have crashed. For the first time, 17 farmers suicides have been reported here. Higher production has actually led to their ruin.

There’s poverty amidst plenty. “Production and exports are reaching record highs every year. But prices are falling, since there is a surplus,” says C.B. Holkar, vice chairman of the National Agricultural Co-operative Marketing Federation. “Farmers can’t even recover their costs.” Onion production all over India has risen from 40 lakh tonnes five years back to 60 lakh tonnes last year, says Holkar. Exports have doubled to almost ten lakh tonnes. But the prices this year have been the lowest in the last five years. The price this year is Rs 200-250 per quintal, while the cost of production is around Rs 350-400. “The government must ensure a minimum support price for perishable goods, just as it does for wheat or oilseeds. Otherwise farmers cannot survive,” says Holkar.

Since onions were a dead loss, several farmers started grape cultivation. Punjaram Thakre’s onion crop has been in losses for many years. Last year, he spent Rs 1.5 lakh to put up a grape orchard. “In the last two years, we weren’t able to recover our costs on the onion harvests. I spent Rs 20,000 to grow onions, but I got back only Rs 8,000. The rate was only Rs 160 per quintal,” says Thakre. “So then, I decided to also invest in a grape trellis. The initial cost was Rs 1.5 lakh. Every year, you have to spend around Rs 50,000 to 70,000 on pesticides, fertilisers, labour. But I got only Rs 40,000 when I sold the grapes.” Thakre’s bank loans have piled up to Rs 2.5 lakh. “I sold half an acre of land, two bullocks and the cart, my tractor and motorcycle. There’s nothing left to sell, but I haven’t been able to repay the bank for the past two years,” says Thakre.

Punjaram Thakre and his son at their grape orchard. Punjaram’s wife committed suicide after the loans they took exceeded Rs.2 lakhs. Their onion crop had incurred losses for several years and forced them to try grape cultivation as well.Photo: Dionne Bunsha

His wife, Shantibai couldn’t deal with the pressure of the paybacks. She jumped into a well on 1st July and ended the ordeal. When we visited Punjaram, they had just completed her 11th day prayer. “For any villager, a ‘lakh’ is a very intimidating figure. My wife had never even spent Rs 500 in her entire life, so we was very worried about how we would pay back more than two lakh.”

Though much more expensive to grow, grape prices were lucrative until two years ago. So, several farmers shifted to grape farming. “In two years, the area under grape cultivation in Nashik district has doubled to 100,000 acres today. The costs of cultivation have also doubled. It’s now Rs 80-90,000 per acre for grapes grown for the Indian market. (Those growing for export spend more than Rs 1 lakh per acre). But the prices have halved from Rs 10-20 per kg three years back to Rs 6-10 now,” says Balasaheb Kshirsagar, from the Maharashtra Grape Producers Association.

“People switched to grape cultivation because no other crop was proving profitable. But now there is greater production, even the price of grapes has fallen. And costs just keep rising. For instance, the price of one pesticide has doubled from last year. And, farmers have to use more than 12 different types of pesticide, and spray six times,” Kshirsagar explains. It costs Rs 11-12 to grow one kg of grapes, but farmers have to sell for Rs 6-10 per kg.

At the market in Niphad, onion farmers, disappointed at the price they get for their crop which is far below the cost of production. Photo: Dionne Bunsha

Until now, farmers have been able to muster up the money for such high cultivation costs because this region is more developed than others. Peasants have better access to water and credit. But as they hurl towards bankruptcy, banks are unlikely to give them loans. “Niphad taluka has the highest amount of loans from banks. Around 87% of farmers have taken loans. Credit is not a problem,” says Ramdas Khedekar, Sub-Divisional Officer of Niphad. “There aren’t many moneylenders here. We will never go to them. They charge 10% per month,” says Sakari Dargude, a farmer from Brahman Gaon village.

Sakari’s son, Vijay (19) killed himself by swallowing poison in the cattle shed on 2nd April 2006. “He didn’t want me to sell the cattle to repay our loan instalment of Rs 1.35 lakh. But without repaying, we would not get a fresh loan for the monsoon season. I didn’t get a proper price for my onion crop, so I had to sell the cattle to pay back,” says Sakari. “So I went and sold them without telling him. When he reached the shed and found the animals missing, he was so upset, he swigged the pesticide.”

“Until they give us a fixed price, we will never progress,” says Sakari. “When vegetable prices in the city go up, they create havoc to make it lower. But the state doesn’t reduce the costs for us. When prices in the city go up, we don’t get higher prices. The middlemen make all the profits. And, no one bothers when prices crash during the harvest season and it’s time for us to sell.” He adds, “What is agricultural minister Sharad Pawar doing for farmers? He wants us all to be out of business and hand over the land to US companies on contract.”

“Why is the government willing to import wheat at Rs 1,400 per q, but it won’t pay its own farmers more than Rs 800-900 per q? Why do city people and the media raise such a ruckus if the price of onions or tomatoes goes up?” asks Kshirsagar.

“Can’t they spend Rs 50 per month more for their food, so that those producing it don’t starve?” he asks.

Frontline, Aug. 26 – Sep. 8, 2006

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