Farm bonanza fails to save India's dying farmers

By Krittivas Mukherjee

PIMPARKHUTI, India (Reuters) - Just before finance minister was announcing a massive farm bonanza last month, Narendra Totaram Chauhan quietly slipped into his cotton fields, opened a bottle of pesticide and drank it.

By the time the minister finished announcing a $15 billion loan waiver to give a new lease of life to millions of indebted farmers, the poison had snuffed the life out of Chauhan.

Over the next few days, while experts debated the efficacy of the staggering relief package, 60 farmers killed themselves, adding to a morbid official statistic: more than 150,000 Indian farmers committed suicide since 1997 unable to repay crop loans.

Though the crisis has been building for years, it presents a grave challenge for Prime Minister Manmohan Singh ahead of national polls next year. Farm distress and soaring prices helped turf out the previous government in 2004 and put Singh in power.

So, Singh's government came up with a plan in the 2008-09 budget: cancel debts of small farmers with loans overdue on Dec. 31, 2007, and which remained unpaid up to Feb. 29.

The write-off came with riders. Beneficiaries can own up to two hectares (five acres) and only bank loans will be cancelled.

This has meant nearly a quarter of 40 million targeted farmers will not benefit because most borrowed from rapacious moneylenders or they own larger tracts of land.

"It's a lose-lose proposition. This will not relieve farmers' distress," said Kishor Tiwari, who leads a campaign against farmers' suicides across the arid plateaus of central India.