NAGPUR, India — Scurrying across his field in the Wardha region of Maharashtra, clicking his tongue at his bullocks, Harkrishan Gadkarni checks on his cotton pickers across the field with undisguised severity.
“Get moving. Hurry! Long way to go today,” he shouts, urging them to speed up.
It is only early afternoon, but his bullock cart is hurriedly being loaded with bags of freshly picked cotton. He wants to ensure that he reaches the government center before sundown.
Gadkarni is after the minimum support price the Indian government offers to counter falling global cotton prices, buying the cotton from farmers at a price that will support them.
The support price has become the last resort for the farmers, most of whom have little or no storage capacity for cotton, and high debt cycles. As prices have fallen way below their expectations in the last two months, farmers have been irate. Politicians also have been indulging in verbal jousting, calling for higher prices, farmer subsidies and other measures. Meanwhile, the government-owned Cotton Corporation of India Ltd. has been overseeing the MSP operation with a budget of 120 billion rupees, or $1.89 billion.
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WWD traveled through western India’s prime cotton-growing areas, which feed garment industries around the world, to get an up-close look at India’s unique cotton economics and the manner in which it affects exports as the country is poised to become the world’s largest cotton producer in 2015.
India is expected to produce 6.63 million tons of of cotton in 2014-2015, according to the Cotton Advisory Board, a figure that is similar to the estimate by the International Cotton Advisory Committee. India is the world’s second-largest cotton exporter after the U.S., and exported 11.7 million bales in the last fiscal year.
The black soil in Maharashtra is perfect for cotton: The state has some 4.19 million hectares under cotton, higher than all of China and one-third of the cotton acreage from India. Mumbai, the state capital, also houses the cotton exchange, which sets the tone for exports.
But Maharashtra also accounts for the country’s highest suicide rate among cotton farmers.
Cotton farm productivity in Maharashtra is also among the lowest in the country. Against an all-India average productivity of 540 kilograms a hectare, Maharashtra’s cotton farms yield only 328 kilograms a hectare. The global average is 802 kilograms a hectare.
Traveling through Maharashtra’s cotton fields, it is easy to see why productivity is so low. Small farms are the norm, which means there are no economies of scale. Like Gadkarni’s farm, others have been subdivided extensively over generations.
Irrigation facilities are rare in this area, leaving farmers dependent on the monsoons. Most farms are rain-fed, and with fickle rainfall — in 2014 rains came late, forcing many farmers to plant the seed twice — farmers still live as they did generations ago, on hope.
A strong cotton market in the last three years driven by Chinese demand lured more farmers to plant cotton. Now, with a late rainfall in this cotton season, which runs from October to September in India, farmers are faced with a huge drop in prices.
Cotton farmers have lived out change over many centuries with India’s long history of cotton. The Greek historian Herodotus wrote about it in the 5th century BC; the British discovered it in the 1600s, and the “white gold,” as it was called, was carried out in shiploads to England. During the American Civil War, trade in cotton from India flourished again as the cotton fields of the American South were destroyed.
The growth of cotton production in India over the past 12 years has been particularly dramatic, rising from 15.8 million bales in 2001-2002 to an estimated 40.8 million bales in 2014-2015, an increase of 258 percent.
Transformation has been happening at every level.
Farmers now own mobile phones where they can check spot rates and the weather, despite a lack of education; even many of the poorer farmers have television sets, and there is a huge focus on education for their children.
Yet some basic things haven’t changed.
Irrigation facilities are abysmal, and rain-fed farming leaves farmers vulnerable, as do fluctuating commodity prices driven by global markets.
“We face this fear every year as we must depend on rain. Meanwhile, the prices of seed, fertilizer and pesticide keep on rising,” Gadkarni explains, as he watches the cotton bags being loaded quickly. He does not own a tractor, and for him it is the steadily increasing cost of labor, which now comes from neighboring states rather than from Maharashtra itself, that appears to be the breaking point.
“We all borrow from the moneylender in the end,” he says. “The interest rates are very high. Then there comes a point where there appears to be no solution. There appears to be no hope. If there is sickness or a marriage in the family, we just sink.”
A few hours’ drive away, in the Akola district, Madhavrao Shinde has a similar complaint. A farmer who owns more than 40 acres of land, most of it under cotton; a tractor, and a working irrigation system, Shinde said it’s the cost of seeds that is skewing his budgets.
“I pay 930 rupees [$15] for 450 grams of seeds. Each acre requires at least two bags of seed. This year I planted it twice because the rains came late, and my first crop failed. Then I pay a heavy price for pesticide; electricity costs have almost doubled; I pay almost double of last year for labor. Our input costs are becoming higher than the selling price, and there is no way for us to cover it,” he says.
In this situation, the fear that the local farmer can end up as one more suicide statistic is high. Cotton farmer suicides have spiraled over the last 15 years; they are still happening with alarming frequency. According to farmers, more than a dozen took their lives in the last week of December alone in the Vidarbha region, in eastern Maharashtra.
Since 1995, more than 60,750 farmers have committed suicide in Maharashtra , according to the National Crime Records Bureau, with almost 300,000 farmers taking their own lives throughout India over the same period. In 2013, there were 3,146 farmer suicides in Maharashtra; 3,786 in 2012, and 3,337 in 2011.
Kishor Tiwari, president of Jan Andolan Samiti, a farmers’ advocacy group, says that falling cotton prices had created a situation “fraught with volatility.”
“Sixty farmers committed suicide in this area in 2014. The traders and mill owners work within their own mafia in which the farmer is the bottom of the pyramid,” he says, adding that while the local traders had the resources to warehouse cotton produce until they got better prices, the farmers did not have any such a luxury. He points out that the global end-user was also “very strong.”
“So the end result is that cotton prices get driven by a mafia in which the farmer himself has no power, no storage capacity for his produce and no say in bargaining for his produce,” says Tiwari.
The sense of frustration is palpable while traveling through the Vidarbha and Amravati districts of Maharashtra, which have been at the epicenter of these deaths. Meeting the families of the farmers brings home the gravity of the situation.
Pintoo Rathore, who is 26; his brother RajKumar, 21, and older sister Sunita talked about the debts left behind when their father died. “He drank pesticide and killed himself more than 10 years ago, and it pains me to see other farmers still doing the same…We were given 100,000 rupees [$1,580] by the government after his death,” the older brother says, referring to the amount the government has been paying the families of the farmers who have committed suicide. “But that was hardly enough to repay his debts and to keep the farm running. My mother had to take over the farm, and she has been doing whatever she can to keep it going.”
Rathore says that although a number of politicians visited to talk about the suicide issue and to discuss ways to help farmers, nothing had fundamentally changed. The same was true of the media teams that visited.
He says that he explained to each visitor that the main need of the farmers was better irrigation and that the various government incentives and tube wells had not been able to solve that problem.
“The government has many schemes to help farmers. But very often they fail to reach us. Or the paperwork drowns us out. Most often, we are not even aware of these schemes. Tube wells cost a lot, and then there is no electricity to run them. Water is still the biggest problem — last year’s crop has suffered because of the late rainfall,” Rathore explains.
Magsaysay Award-winning journalist Palagummi Sainath, who has written extensively on the agricultural sector, has observed in his columns that “the monsoon does have a very real impact on agriculture. But it is by no means the main reason for the farm suicides. And with the bulk of those suicides occurring amongst cash crop farmers, the issues of debt, hyper-commercialization, exploding input costs, water-use patterns, and severe price shocks and price volatility come much more to the fore. All factors majorly driven by state policies.”
Although nongovernmental organizations that work at the grassroots level talk about the crisis of suicides of cotton farmers, economists have noted that farmer suicides are not necessarily linked to cotton, and are perhaps more rooted in broader agrarian economics. Across the country, there were 11,744 farmer suicides in 2013, down from 13,754 in 2012.
Although government officials maintain that the numbers are going down, activists believe that suicides are being classified as murders or natural deaths to help deflate the statistics.
However, D.K. Nair, secretary general of the Confederation of Indian Textile Industry, has a different view. He contends that suicides are largely driven by psychological or social causes — borrowing for family reasons including weddings (which are often ostentatious in India), for medical reasons, education or alcohol. In India, they also are often perpetuated by high interest rates on the money that farmers are forced to borrow from moneylenders.
Nair cites the fact that farmer suicides in Maharashtra peaked in 2007, when cotton prices were high, declined in 2009 and rose again in 2011 when cotton prices were high, explaining that the link between cotton sales and suicides may not be as obvious as it seems. “It’s being linked to cotton farmers. But how about farmers in other sectors — isn’t the issue the same for them?” he asks.
Some nongovernmental organizations have linked the farmer deaths to the growth of genetically modified Bt cotton, which was introduced in India in 2002. The arguments for and against Bt are divisive and greatly politicized. It is either praised, even venerated, or criticized, by farmers; NGOs mention it with a mix of anger and hatred, and agricultural scientists appear to be divided in their support, although they are mostly in favor of it.
Yet on the ground, there appears to be little disagreement: Almost 95 percent of cotton grown in India today is Bt. Supporters point to its widespread use as well as the corresponding growth in yield in India over the last decade and decline in pesticide use.
Like Nair, they believe that farmer suicides are not related to Bt cotton but rather to other elements of agrarian economics and are a factor of a relatively large population.
However, there is a strong lobby opposed to Bt cotton, and much of the criticism is targeted at companies such as Monsanto India Ltd., the Indian arm of the American company that is the world’s largest producer of genetically modified seeds. The new seeds were welcomed in India in 2002, particularly as this strain of cotton is resistant to the American bollworm, an insect that was ravaging cotton crops, resulting in extensive use of pesticides.
“Promises were made of higher yield and a reduction of pesticide costs to initially woo farmers. With a monopoly, Monsanto increased the price of seeds since it didn’t have to compete in the market. In India, the agents that sell Monsanto seeds also sell the pesticides and fertilizer, on credit,” Vandana Shiva, an environmental activist who has campaigned extensively against Bt cotton, said last year in an analysis of cotton farmers. “A Bt cotton farmer starts the cultivation season with debt and completes the cycle with the sale of the crop after multiple applications of fertilizer and pesticide acquired on more credit.”
Nair, who speaks extensively about the technology, says, “I am no advocate of Bt cotton, but you should understand that the farmer is not a fool. If it didn’t work for him, he would not plant the Bt season after season for more than 10 years. More than 90 percent of India uses Bt cotton. The difference in yield speaks for itself too.”
Speaking to farmers across the different regions of Maharashtra, it is obvious that there had been considerable campaigning from both sides: Representatives of the seed companies as well as NGOs opposed to the genetically modified seeds.
“The ground ceases to be fertile after a few years of using Bt,” a farmer in a discussion on the cotton industry explains in a village on the border of the Wardha and Amravati region. “It also needs much more water and care, and the seeds must be bought each time and cannot be reused.”
Farmers who support Bt cotton claim their yield has increased dramatically, and their spending on pesticides has dropped.
Scientists have said that the ground ceases to be fertile if alternate cropping is not carried out. But since cotton is planted in June and July and harvested from November to February, it is hard for farmers to plant another crop with no rainfall. Meanwhile, soybeans are another crop of choice for farmers in this region, who share part of their land area with soybean plantations.
A study on Bt cotton by C.D. Mayee and Bhagirath Choudhary estimated that the cost of cultivation in 2013 was an average of 36,520 rupees, or $575, a hectare, with the costs of seed constituting 12 percent; pesticides, 7 percent; fertilizers and irrigation, 17 percent, and labor for weeding and picking about 55 percent.
Farmers in the regions around Nagpur agree with that breakdown, adding that the government’s MSP this season barely covered those costs. In addition, government centers were often hard to reach, required long waiting times, and the crop was often discarded after it was evaluated because it had a higher humidity level than normal given the late monsoons.
The central government has fixed an MSP of 3,750 rupees, or $59, per quintal (which is equal to 100 kilograms) for medium staple cotton and 4,050 rupees, or about $64, per quintal for long staple cotton for the 2014-2015 season.
As an alternative to selling to the government centers and going around the open market, many farmers have developed working relationships directly with ginners.
At a ginning plant in the Wardha region, Milind Patekar negotiates prices directly with cotton farmers who bring in their produce in trucks, carts, auto rickshaws and cycles. The process that separates the seed from the cotton begins at the ginners — cotton is then cleansed and packed into bales, ready to leave for export or to the textile mills within India.
“We have been making a lot of effort to improve technology for ginning,” says Patekar. “Because that influences the final quality of cotton. Machines are expensive, though, and we are still not nearly as mechanized as the West.”
Further north of the Amravati district, in Jalgaon, there is a perceptible change in farming techniques. In general, there is less dependence on rain-fed farming; farmer suicides are low as well. In the town of Chopda, an experiment with more than 325 acres of high-density planting, varying the use of pesticides and experimenting with seeds, has resulted in a doubling of yields and fewer attacks by pests.
Farmers and scientists from the region believe it represents a way forward for the future.
Sunil Gujrati, who works with the agricultural ministry in Jalgaon and is a farmer himself, said that a focus on high-density plants could change the cotton map of India. “Many farmers believe that planting should be done at a certain distance and that leaner plants would have fewer bolls. But on the contrary, our experiments have shown that leaner plants can double the output if it is done right. We also have irrigation facilities set up for every farm,” he says.
The project in Chopda is sponsored by the Cotton Association of India and COTAAP Research foundation. CAI is a body of traders with their head office in Mumbai who add the final and crucial link for cotton: from the farmer to the mills and to export markets.
The Cotton Exchange is a building that houses cotton buyers and sellers in central Mumbai, the capital of Maharashtra and the port city from which British colonial-era ships would leave laden with cotton for British mills, when the city was still called Bombay. A local train station nearby, named Cotton Green, is surrounded by abandoned mills that thrived in the early and mid 20th century. One of them, Phoenix Mills, has become an important retail area and a shopping mall.
The exchange, an impressive building constructed in 1924, houses the offices of the cotton sellers, all along one side of the corridor. Sunlight falls uniformly on this side, and the offices are brightly lit so that the cotton samples they show can be best examined. On the other side of the same corridor are offices of the buyers, darker, but serving their purpose of proximity to the sellers. This organization is replicated throughout the building’s three floors.
On the third floor, in a giant conference room on a Saturday, when the entire building is silent and only the guards sit at attention, Dhiren N. Sheth, president of the Cotton Association of India, sits at the head of a large table sorting out dozens of pending matters.
“What India has done is nothing short of fantastic,” Sheth says, his voice resounding in the empty room. “We are on the doorstep of surpassing China in cotton output and becoming the world leader.”
He said that the changing profile of the cotton trader is clearly indicative of the way Indian business has transformed. As the third- and fourth-generation traders travel overseas to study and return with global degrees, they bring back new ideas and plans to grow their companies.
Citing the problems in the sector — productivity, rain-fed farming, and irrigation — he says thoughtfully, “But look at what’s happened over the last decade. India has the largest acreage under cotton, which constitutes around 37 percent of the world’s total cotton acreage. Cotton production has more than doubled and is estimated to be 40.2 million bales in 2014-2015. Consumption of cotton is second only to China at an estimated 30.6 million bales in 2014-2015. India exported 11.79 million bales in 2013-2014, in which we are second only to USA.”
He adds, “Indian cotton has witnessed an all-round growth and taken rapid strides in acreage, production, productivity, consumption and export. It is a matter of pride.”