NEW DELHI (AFP) -India’s cabinet has cleared a 3.7-billion- dollar package to try to stem farmer suicides in the cotton-growing belt but experts have said it may not help those hardest hit by rising debt.
The package approved late Friday provides for loan rescheduling and investment in irrigation and crop diversification for farmers crippled by debt and falling cotton prices which have prompted many to commit suicide.
The relief package also includes nearly 3.5 million dollars to help the families of farmers who have killed themselves.
“The rescheduling (of debt under the new package) is only for loans from institutional lenders,” said Surinder Sud, agriculture editor of the Business Standard financial daily Saturday.
“The suicides are by farmers from small land holdings who have taken loans from non-institutional lenders. They do not benefit at all. That is the problem.”
Some of the money-lenders, who include local politicians and businessmen, charge up to 120 percent annual interest from the farmers. About 90 percent of farmers use private money-lenders.
There was no immediate comment available from government officials.
Thousands of farmers in four Indian states have killed themselves in the last five years in despair at falling cotton prices and a mountain of debt.
The money for the farmers will be spent over three years in “suicide-prone” districts in the western state of Maharashtra and the southern states of Andhra Pradsh, Karnataka and Kerala.
About 60 percent of the money will be spent as subsidies and grants while the remainder will be offered as loans.
But the mammoth package appears to contain the same flaws as an initial 835-million dollar relief measure announced earlier this year, experts said.
The package approved in July allowed for the waiver of farmer interest payments to state-owned banks but did little to address the issue of the private money-lenders.
Indian officials earlier this year said more than 8,900 farmers hit by debt, drought and falling prices had committed suicide since 2001, including 980 in Maharashtra.