Trade reforms backed and funded by the British Government have caused an agricultural crisis in India which has sparked an epidemic of suicide among impoverished farmers, a leading charity claims today.
More than 4,000 farmers have killed themselves in the Indian state of Andhra Pradesh since a programme of free-market measures was implemented by a "hardline liberalising regime" with the help of a £1.65m grant from the Department for International Development (DfID).
A study for Christian Aid claims that the dramatic increase in the suicide rate, which saw 2,115 farmers take their lives last year compared with 588 in 2003, is directly linked to British support for policies joining aid to economic liberalisation in developing economies.
Research found that farmers in Andhra Pradesh who had traditionally grown their own food were persuaded between 1999 and 2004 to swap to cash crops and incurred large debts which they were unable to pay due to wildly fluctuating global prices.
The result has been a catalogue of family tragedies among thousands of peasant farmers who were forced to approach unscrupulous money lenders to fund fertilisers, pesticides and water boreholes that produce little or no financial return.
Among the methods of suicide chosen by victims has been to drink the pesticide they hoped would transform their economic prospects.
Daleep Mukarji, director of Christian Aid, said: "It is a scandal that the British Government has backed policies and pumped British taxpayers' money into schemes which have contributed to poor Indian farmers killing themselves.
"The report shows in stark detail the damage that is done to poor people when the dogma of so-called 'free' trade is pursued in the name of poverty relief."
The study commended DfID, which has spent £248m on aid to Andhra Pradesh since 2000, for its work on improving health and education in the region.
But it found that the ministry was also bankrolling the closure, restructuring and privatisation of 43 state-run enterprises, including agencies supporting farmers.
The programme, run by the ultra-liberal state government of Andhar Pradesh until it was voted out of office last year, was advised by consultants from the London-based Adam Smith International - a commercial enterprise affiliated to the right-wing free-market think tank, the Adam Smith Institute.
The consultants were working for the Implementation Secretariat - a body set up by the state government with the help of a £1.65m grant from DfID.
Professor Jayati Ghosh, an academic in Delhi who chaired a commission on farmers' welfare charged with investigating the results of free market reforms, said it was clear that there was direct link between the suicides and the liberalisation measures.
He said: "The crisis of suicides is very clearly a result of public policy. And this has been guided by and substantially determined by agencies like DfID."
The Christian Aid study found that the reform programme, which was also backed by the World Bank and the International Monetary Fund, aimed to turn much of farming in India into "agribusiness".
Among the measures taken by the Implementation Secretariat in Andhra Pradesh between 1998 and last year was the closure of four state agencies, including one which sold farmers machinery and tools at subsidised rates. Another body which provided a reliable source of seed to poor farmers was reduced to a "dormant" state.
In the decade from 1991, the area of farmland in India used to grow traditional grains such as rice declined by 18 per cent. In the same period, land dedicated to the production of cotton and sugar cane increased by 25 per cent and 10 per cent respectively. At the same time, subsidies for fertilisers were slashed and cheaper loans from banks were reduced, resulting in farmers going to private lenders charging interest rates of at least 36 per cent to fund new crops that rapidly became worthless on the global market because of over-production and cheap imports.
A survey of 40 farmers who committed suicide in Andhra Pradesh found that each on average owed 106,000 rupees (£1,300) - roughly five to 10 times their normal income.
The Christian Aid report said: "These are not deaths from just one area or from just one type of farming. This is suicide on a scale that is surely unique in modern times. The immediate cause of these deaths is debt. This debt was brought on by a number of factors, all of which, except for the weather, can be ascribed to liberalisation."
Both Adam Smith International, which said it had had no role in drawing up the liberalisation policy, and DfID denied that there was a direct link between the high levels of suicide and the market reforms.
The Government announced earlier this year that there should no longer be a formal link between aid and economic liberalisation.
A DfID spokesman said: "Our support for economic reform in Andhra Pradesh, including the privatisation of state-owned enterprises, has helped safeguard the livelihoods of around 2 million people. Without reform, the state government would have continued to spend hundreds of millions of pounds subsidising loss-making enterprises."
http://news.independent.co.uk/world/asia/story.jsp?story=638638
