The continued sharp decline in genetically modified cotton yields has led to what is being called the "Indian Agricultural Crisis". This crisis has led to the consequences of farmer suicides.

Farmer suicides involve a complex set of factors. Let me try to organize them in a very rough but major way.

A. Decline and slump in Indian cotton prices
B. Increased cost of growing genetically modified cotton
C. Sharp decline in genetically modified cotton yields

When I think of the reasons why cotton farmers are driven to suicide, I think of the above three reasons. I myself have been to the Deccan Plateau, one of India's cotton-producing regions, many times, and these three stories always come up.

First, a brief description of A.

The Indian government has been opening its markets since joining the World Trade Organization (WTO). Around 2000, there was a big debate over whether to open up the cotton market, which is a symbol of Indian agriculture, and gradually the ban on imports of cotton produced in the U.S. and China was lifted.

As a result, cheap cotton from the U.S. and China flowed into India in large quantities, and the price of Indian cotton dropped sharply along with it. Naturally, the income of Indian cotton farmers also declined.

Many people may be wondering here.

"Understandable because of China's low labor costs, but why would American cotton be distributed so cheaply that it would sharply lower the price of Indian cotton?”

The answer lies in the U.S. government's policy of protecting cotton farmers (Agricultural Act). The U.S. policy is to subsidize cotton farmers to increase their international competitiveness. No matter how much cotton is grown industrially on a large scale, the cost of growing it in the U.S., where labor costs are high, is high. The U.S. government uses taxpayer money to cover the high cost of home-grown cotton for export.

It is estimated that if the U.S. abolished its protectionist policies for its own cotton, the international price of cotton would increase by 10% to 20%. While advocating free trade, the U.S. agricultural policy continues to be one of protection.

These effects have had a strong impact on Indian cotton farmers, who have continued to grow cotton traditionally. It is said that the influx of cotton from the U.S. and China into the domestic market caused a drop in cotton prices of approximately 30% to 40%. In response to this situation, the Maharashtra state government provided relief to cotton farmers through subsidies, but this did not lead to a fundamental solution.

( to be continued )