Let us take two propositions. First, farmer suicides are caused by debt; and second, suicides are generally associated with the commercialisation of agriculture, such as the prevalence of cash crops. Anyone with any respect for evidence should agree that the second proposition is empirically more robust than the first. Let us splice this with the findings of the Radhakrishna Committee report. First, only 48.6 per cent of farmer households are indebted and only 57.7 per cent of debt (there is an alternate figure of 51.3 per cent) is formal. That is, only 28.4 per cent of farmers are indebted to the institutional system. Second, 74 per cent of debt from non-institutional sources (money-lenders) is at rates in excess of 20 per cent, sometimes 30 per cent.

Third, other than the reform agenda mentioned earlier, commercialisation and absence of satisfactory risk-mitigation instruments are responsible for debt and suicides. Though the Radhakrishna Committee didn’t use such language, the present crop insurance scheme is a joke. And let us not forget a finding mentioned in passing, though it didn’t form part of the main thrust of either findings or recommendations.

Fourth, the government failed to utilise the farm relief package the prime minister announced for 31 districts in AP, Maharashtra, Kerala and Karnataka. That doesn’t augur well for the present placebo treatment.

Consider also the following. First, there will be discrimination in favour of farmer suicides, as opposed to other suicides. There are poor among non-farmers and they too commit suicides and are also often in debt. Is that the reason why the entire country is now becoming rural? Second, debt waiver can only be linked to the formal credit system, which means access by relatively rich farmers. So we reinforce inequity that also has a regional dimension, and discriminate against the Centre, East and Northeast. Third, debt waiver is only for crop loans. But poorer farmers don’t borrow under this head. They borrow for smoothening consumption, for livestock, implements, marriages and medical treatment. Fourth, regardless of agro-climatic region, state of irrigation and use of land, should we have a uniform cap of 2 hectares? Fifth, given the sentiments about corporate governance that emanate from North Block, shouldn’t we acknowledge that boards of banks should have independent decision-making powers? Sixth, if the true intention is to recapitalise cooperative banks, let us be transparent. Can a trillion-dollar economy afford such follies?

... contd.