• The average indebtedness for a farmer with landholding upto 2 hectares is only Rs 8,870, according to the Radhakrishna report. Most of this is not under the head “crop loan” but under livestock, implements and even marriages. This waiver is only for crop loans.

• This step is likely to benefit poor farmers in richer, more developed areas of the country for the simple reason that it is in these areas that farmers have access to institutional credit. For instance, average outstanding debt per farmer household has been found to be higher in the state of Punjab followed by Kerala, Haryana,

Andhra Pradesh and Tamil Nadu — all relatively developed and better-banked states. “On the other hand, the incidence of indebtedness as well as outstanding debt per farmer was low in the states of central, eastern and north-eastern regions, pointing to the inadequacy of banking services,” points out the Radhakrishna report.

Among the main reasons responsible for farm distress is: increasing costs of production and lack of adequate support and market prices for produce, repeated crop failures; lack of irrigation facilities and lack of adequate crop insurance. For this reason, the committee had recommended a one-time measure of providing long-term loans by banks to farmers in order to help them repay their debts. It had even recommended setting up a moneylenders’ debt redemption fund to get over the most important problem that ails the farmers.