May 22 (Bloomberg) -- Sachin Ingale slipped out of his family’s two-room, white-painted mud hut about 4 p.m. and walked into their farm field where the 22-year-old took a deep swig of pesticide from a plastic bottle. He died later that evening.
Four months later, the mercury is pushing 50 degrees Celsius (122 degrees Fahrenheit) in his village in India’s Maharashtra state. Inside the family hut, a picture of a serene Buddha decorates a wall above a cracked concrete floor.
Elder brother Satish Ingale is sitting on a plastic chair in a white singlet as he explains the pesticide killed Sachin, but it’s the loss of water rights to heavy industry, the worst drought in four decades and the rise in debt that follows that’s causing farmers to take their own lives.
In 2003, Maharashtra -- which is bigger than Italy and has a population of 112 million or about the same as Mexico -- gave industries and municipalities access to 25 percent of the water in its irrigation reservoirs. Power plants were the biggest beneficiaries, prompting a spurt of investment, according to a March report by Pune-based non-profit advocacy group Prayas.
“Water for food and water for industry is a debate on in much of the world, and we’re no exception,” Sachin Kalantre, a deputy administrator in Maharashtra’s Amravati town, said in an interview. “The way out is for both to work together. There has to be a consensus,” he said, with a picture of a waterfall filling the wall of his office behind him.
More than 2,200 farmers in India committed suicide in the past four years, as water loss and drought drove them deeper into debt. Sachin Ingale killed himself the same day his family’s tractor was repossessed for two missed loan repayments.
The suicides on the one hand and a power shortage on the other pose a dilemma for an economy trying to boost the slowest pace of growth in a decade.
While routing water to industry can rob India’s 235 million farmers of supply, electricity shortages and blackouts close companies, cut jobs, impede education and put the lives of hospital patients in peril. Prime Minister Manmohan Singh’s government promised electricity to every household by March 2012. About 400 million of the nation’s 1.2 billion people today are still without power.
Increasingly, farmers are fighting back to stop power plants and factories siphoning off water needed for crops, threatening to stall more than $100 billion in spending by such companies as electricity utility Indiabulls Power Ltd., South Korea’s Posco and Luxembourg-based ArcelorMittal.
Posco’s proposed $12 billion steel plant in the eastern state of Odisha has been stalled for more than seven years because of opposition from farmers concerned about loss of land and water rights. ArcelorMittal, which plans to build a $10 billion steel mill in both Odisha and in the neighboring state of Jharkhand, has faced similar resistance.
The water connection to Posco’s plant from a nearby dam won’t affect supplies to the residents of the area, Posco India spokesman I.G. Lee said in an e-mail. Vijay Bhatnagar, the chief executive officer for India and China at ArcelorMittal, declined to comment when reached on his mobile phone.
“Water is our life,” said Satish, 25, cradling a photograph of his dead brother. “We’ll be finished if we don’t water the fields. What can we do but hope and fight?”
The drought in Maharashtra isn’t just because of a lack of rainfall. In the state’s Vidharbha region, where Indiabulls is building a power station, monsoon rains last year were an average 8 percent above normal, according to Meteorological Department data.
“Rainfall isn’t always the problem, inefficient distribution for irrigation is,” said Mandar Sathe, a senior researcher for Prayas. “A lot of the drought is man-made.”
Mumbai, India’s financial hub, is the capital of Maharashtra, which in turn is famed for its sugar and cotton plantations along with mango and orange orchards.
Those harvests depend on the state’s 12 main reservoirs and eight of them have water levels below the 10-year average, according to data on the Central Water Commission website. The Jayakwadi dam, the state’s second-biggest, has dried up, according to the commission.
Yet, electricity demand in the country is growing and lack of investment led to a blackout in July in an area inhabited by more than 600 million people. The gap between peak demand and supply is about 9 percent. Water shortages have prevented construction of 30,000 megawatts of power plants throughout India, 13 percent of current capacity, Naina Lal Kidwai, country head of HSBC Holdings Plc, said April 24.
India and China alone plan to build $720 billion of coal-burning power plants in two decades, or more than twice the total power capacity in the U.S., International Energy Agency data show. Coal-powered plants on average consume three times as much water as natural gas-fired stations per unit of power produced, according to U.S. Department of Energy data. The water is boiled to produce steam and drive turbines.
“The situation is somewhat more acute in India than in China, because the per-person availability is lower,” said Richard Manley, a Hong Kong-based Managing Director at Goldman Sachs Inc. “Today, the situation is at a point where it’s quickly going to become a real business risk in Asia,” said Manley, the Asia head of GS Sustain, which analyzes environmental, social and governance issues.
India, the second-biggest producer of rice, wheat and sugar, is the most vulnerable among the world’s leading industrial and emerging economies to future water stress, according to HSBC. India exhibits the most worrying trends among the Group of 20 nations with the resource “hovering dangerously near extreme scarcity levels” by 2030, HSBC said in a Sept. 19 report.
Indiabulls Power is building a $1.3 billion coal-fired electricity plant in Maharashtra that is emblematic of the water conflict between heavy industry and agriculture in India.
The New Delhi-based company has been allocated 87.6 million cubic meters of water annually from the Upper Wardha dam about 20 miles from the 2,700 megawatt plant, according to its website. It hasn’t been able to build a water pipeline from the dam because 5,000 farmers, Ingale among them, oppose it.
“We haven’t given permission for the pipeline to run under our village,” said Durgabai D. Aghane, headwoman of Nimbi village, which is on the planned route of the pipeline. “People are committing suicide. Look at what’s happening because there’s no water.”
Indiabulls Power’s offices in Amravati, about 15 kilometers (9 miles) from the plant, were attacked by people protesting the water allocation in March, Press Trust of India reported March 25, citing a company spokesman. The previous day its offices in Mumbai were also attacked, according to the report.
Kubeir Khera, vice president for marketing at Indiabulls, didn’t respond to more than three requests for comment.
‘Years of Neglect’
“Conflicts between industry and farmers will get worse as water becomes more and more scarce,” said Jai Krishna, an official at environment lobby group Greenpeace, who campaigns for farm-water rights in Maharashtra’s Vidarbha area and other parts of the country. “Prioritization of water for farmers over industry is essential especially in an area where irrigation has been neglected for years.”
Indiabulls Power isn’t the only utility facing water shortages. Maharashtra State Power Generation Co. shut a 1,130 megawatt plant in Beed district on Feb. 15 because of lack of water, said Mahesh Aphale, a Mumbai-based spokesman for the company.
“We had to close the plant because drinking water had to be given priority over all else,” Aphale said. “We were working at half the capacity for about two-and-a-half months since November.”
Ajit Pawar, deputy chief minister of Maharashtra, and Sunil Tatkare, minister for water resources, could not be reached after eight calls made to each of their offices on May 14 and 15 for comment. Neither responded to e-mails.
‘Nothing to Hide’
“Definitely there’s a water shortage in India, there’s nothing to hide,” federal Water Resources Minister Harish Rawat said in New Delhi on May 17. “It’s for the regional governments to decide how they’ll allocate water to agriculture and industry.”
The water assigned to Indiabulls Power from the Upper Wardha dam is enough to irrigate 23,200 hectares of land, according to the Maharashtra government. The diversion will affect land owned by about 25,000 farmers, according to Sanjay Kolhe, coordinator of farmer body Kisan Ekta Manch, the organization protesting the water allocation.
Another 1.98 billion cubic meters of irrigation water was diverted between 2003 and 2011 from 51 dams, according to researcher Prayas. Of this, 46 percent was allotted to industries and more than half went to power plants. The diversion reduced the irrigation potential in the state by 323,296 hectares, it said.
Wheat farmers in Maharashtra may have lost as much as 5.71 billion rupees ($104 million) of potential earnings because of reduced water availability for the crop, Prayas estimates. While the government announced debt relief of 600 billion rupees for the nation’s rain-starved farmers five years ago, the waiver failed to benefit the Ingales.
“We have to live with debt,” said Satish, who now borrows his neighbor’s tractor. “You just sink further and further into debt. There’s no end.”
To contact the reporters on this story: Rakteem Katakey in New Delhi at email@example.com; Rajesh Kumar Singh in New Delhi at firstname.lastname@example.org; Archana Chaudhary in New Delhi at email@example.com