Editor's note: On 26-28 March 2007, the Global Subsidies Initiative, together with the Indian Federation of Environmental Journalists, convened a forum of Indian journalists, researchers and specialists to examine the role that subsidies have played in India's agrarian crisis. This report is based on interviews conducted with journalists and experts during the Mumbai Media Forum, the first of a series of regional events designed by the GSI to raise journalists' awareness of the impact of subsidies on sustainable development worldwide.

Jaideep Hardikar, an Indian journalist with Daily News and Analysis (DNA), spends much of his time in rural Vidarbha, in the state of Maharashtra, where it is estimated that on average a farmer commits suicide every eight hours. It his job to document this disturbing symptom of what has become widely known as India's "agrarian crisis", but also to uncover the underlying root causes.

"I see the suicides as an entry point into a larger crisis facing the rural economy, for which there are many factors," said Mr. Hardikar. "The farmers ask very simple questions. They ask why cotton prices have changed. But the answers are very complex."

As India's services sector grows in economic might, productivity in its agrarian economy has lagged behind. "While China started its reforms with agriculture, India is starting at the top of the pyramid with services, and poverty reduction has been much slower as a result," said Ashok Gulati, Director in Asia of the International Food Policy Research Institute (IFPRI).

Numbers tell some of the story of India's agricultural crisis. Over the last decade, some 100 000 heavily indebted farmers have committed suicide, although this may be an under-estimate. Productivity has slowed to a crawl in the agricultural sector; with growth rates of only 1.1% during 2004-05. Meanwhile, as a result of continuing division among inheritors, farmers' land holdings have steadily shrunk; today, 80% of farmers own less than 2 hectares of land.

The recent decline in India's agricultural performance follows its greatest boom: the Green Revolution, which began in India in 1968 and stretched into the early 1990s. Productivity exploded with the introduction of new seed strains, pesticides, irrigation and nitrogen fertilizers.

"Farmers achieved as much progress in wheat production in four years as during the preceding 4000 years," says Professor M.S. Swaminathan, widely referred to as the scientific leader of the green revolution movement. But in the 1990s fatigue set in, as the agricultural growth rate dropped below the population growth rate, setting the stage for what Professor Swaminathan calls the current "era of farmers' suicides."

Subsidies at both a global and local level have played a part in the current crisis. Well known are wealthy-country subsidies to commodities such as cotton, which have driven down world market prices. Cutting back America's generous subsidies to its cotton farmers would go some ways in easing the pressure on competing farmers in India and elsewhere. Erased completely, the World Bank has estimated that world market prices could jump as much as 13%. However, a deal at the World Trade Organization, if one is reached, would likely see a much less drastic cut to cotton subsidies, and thus a more marginal impact on world prices.

Federal and state level subsidies in India also shoulder some blame. "Two-thirds of the solution is getting our own house in order," said Dr. Gulati.

The bulk of India's input subsidies flow to electric power, irrigation and fertilizer production, and all three have been shown to be badly targeted to India's poorest farmers.

The South Asia Rural Development Unit of the World Bank recently looked at surface irrigation subsidies in four states: Andhra Pradesh, Karnataka, Maharashtra and Uttar Pradesh. It found that the majority of these state-level subsidies are not reaching poor farmers; depending on the state, up to 80% of the subsidies benefited medium and large farmers. In fact, only 13% of agricultural households in these states used canal irrigation.

Fertilizer subsidies in India have been similarly criticized. These are indirect, going to the fertilizer producers, not the farmers. As such, "the benefits accrue more to manufacturers and large farmers than small and marginal farmers," says Amar Nath H.K., senior economist with the New Delhi-based National Institute of Public Finance and Policy.

Promisingly, however, there is optimism that a blend of improved crop varieties and intelligent policy reforms can pull India's agrarian economy out of its slump.

Professor Swaminathan suggests that there is an untapped production reservoir, with considerable scope for greater yields. In China, for instance, 4.25 metric tonnes of wheat are grown per hectare. In India, it is 2.71 tonnes/hectare. The United States, France and China grow between four to eight times more maize per hectare than India.

Yet the introduction of improved crop varieties needs to be twinned with education and institutions that farmers trust. Crop failures across India have been blamed on farmers missusing genetically modified seeds, or purchasing counterfeit seeds.

Where India can afford to invest in its agrarian economy, it would be better placed in developing rural infrastructure and education, rather than input subsidies. "Marginal returns on subsidies have gone down over time," says Dr. Gulati. "If government has money to spend, [the] return is much better if it goes into research and development, followed by roads."

For Jaideep Hardikar, and other journalists who have chronicled India's agricultural decline, their countless stories on farmers' suicides are only the tip of the iceberg. "We report on suicides as a way to get attention," he says, and the strategy has worked. "Finally, there is acknowledgment at the political level that there is a crisis. Now the real reporting will start, by exploring the causes."

An impetus to such reporting, in the form of investigative journalism on subsidies and the Indian agrarian crisis, was the very purpose of the Global Subsidies Initiative's first regional Media Forum in Mumbai last month.