GMOs and Indian Suicides

Just as Keith Kloor seems to put the issue (or myth as he calls it) to rest in an article recently appearing in Issues in Science and Technology, now comes a new article in the journal Globalization and Health suggesting a link between farmer suicides in India and farmer debt, a finding that will no doubt re-ignite the argument that adoption of GMOs caused suicides.  Indeed, the authors conclude the article by saying

Some observers have suggested that the introduction of genetically modified varieties of crops since liberalization has considerably worsened the situation . . .

 For background on the controversy, see this Wikipedia page.

I personally didn't find the new analysis in Globalization and Health as being particularly compelling, and it does NOT, as some reports of the study have suggested, provide "causal links."  The authors estimate simple linear regressions specifying suicide rates (suicides per 100,000 people per year) in a region (or state) as a function of indebtedness (measured as the % of farmers in a region that have taken out a loan in excess of $5).  

I don't doubt that indebtedness and suicides are correlated, but isn't it possible that there is some unobserved factor (or factors) causing both?  Macro-economic conditions? Social-cultural factors within a region (there are no regional fixed effects in the models)? A shift in time preference caused by other unobserved factors? If this sort of endogeneity exists, the estimates are biased.  Although the authors have 5 years of data on their dependent variable, they only have one measure of "indebtedness" at a single point in time, and assume it is the same for all time periods; thus, they cannot include year by region fixed effects.  This means that they cannot separate other regional-specific shocks to suicides from indebtedness effects.

For a more complete and through analysis of the issue, I suggest the papers by Guillaume Gruèrea and Debdatta Sengupta, which first appeared in a working paper with IFPRI and then later in a more condensed form in the Journal of Development Studies.