Import duty cut threatens sericulture livelihoods

When a silk reeler informed Swami that his cocoons would fetch him only Rs 120 a kg — and not the promised Rs. 320 — the 35-year-old sericulture farmer was devastated.

At midnight on March 5, relatives heard him quarrel with his wife. Nothing, however, could have prepared them for what they saw the next morning. Swami was found hanging from a tree on his field, while his wife Vasantha had hung herself from the ceiling.

The couple, residents of Valagere Doddi, around 60 km from Bangalore in Mandya district, leave behind three children: Sharath (3), Keertana (5) and Chandrika (6).

Poignant story

This is the first suicide by a sericulture farmer reported in Karnataka. This poignant story, however, is much more than just a case of one family's inability to cope with adversity.

The suicides appear to have been triggered by the plunge in the price of silk cocoons, following the announcement in the Union budget that the import duty on raw silk would be cut from 30 to a mere five per cent. Anticipating this, reelers pulled out of the market by late-February, and cocoon prices plummeted from Rs. 380 a kg in January to Rs 120.

Swami's grieving father, Boregowda, 65, himself a sericulture farmer, says his son owed Rs.1.2 lakh to debtors. Two of his six crops in 2010 had failed, and the land lease (at Rs.10 per plant a year) was outstanding. “ Now how will a man of my age fend for three children?” he asks. While he hopes the government will offer compensation and make provisions for the children's future, he points out that no district official has visited them.

It is not just the matter of the crash in cocoon prices that are driving farmers to distress. Government support for sericulture has weakened. For example, the Government Model Grainage, a few yards from Swami's home, barely functions, forcing them to buy from private agents at Rs.1,200-Rs.1,800 a kg of eggs (compared with the government rate of Rs. 300). The inputs cost ranges from Rs.80 to Rs. 120 a kg of cocoon.

“Many of us buy water for this labour-intensive crop. If we aren't assured at least Rs. 250 per crop, how will we survive?” asks Jayaramegowda. In the absence of any institutional credit, silk farmers often borrow from private lenders at high rates of interest.

Risk

Karnataka produces more than 60 per cent of the country's silk. In Mandya district, an estimated 92 per cent are small and marginal farmers. Here, the area under mulberry came down from 16,416 hectares in March 2010 to 12,398 hectares in January 2011. In that period, cocoon prices increased from an average of Rs.192 to Rs. 229 a kg. When it touched Rs. 380 in December, farmers were tempted to take investment risks, says Krishne Gowda, sericulturist and district convenor of the Karnataka Prantha Raithara Samiti (KPRS).

The Samiti demands that the government fix a minimum price of Rs. 400 a kg for cocoons. More importantly, it wants the import duty reverted to 30 per cent. “In January, global tenders for importing 2,500 tonnes of duty-free silk were finalised. Chinese silk is already cheaper than Indian silk. These duty cuts will drive us out of business,” he says. Though the trigger is a flawed policy of the Central government, the State, too, has failed in responding to the crisis, he says.