Indian state writes off farm loans to end protests

MUMBAI-Agence France-Presse

A western Indian state has agreed to write off loans to farmers estimated to be worth nearly $5 billion after 11 days of protests that have strangled supplies to the country’s financial capital, Mumbai.

Maharashtra state’s chief minister Devendra Fadnavis said his government would pay off the loans, bowing to the demands of thousands of farmers who had gone on strike.

“(The) government agrees for loan waiver for farmers,” he tweeted late on June 11.    
 
He said the state government would also agree to demands to increase the price of milk.

“Farmers and their betterment was, is and will always be this government’s top priority,” he added.

He did not give a value for the loans but they are estimated to be worth around 305 billion rupees ($4.75 billion).

Maharashtra is one of several largely agricultural Indian states that have suffered disappointing rains and crop failures in recent years.

More than 1,417 farmers killed themselves in Maharashtra in 2016, according to official figures.

The loans pledge follows a similar move in Uttar Pradesh, India’s most populous state, whose new Chief Minister Yogi Adityanath has pledged to write off $5.6 billion in debt to help struggling farmers.

India has nearly 260 million farmers and farm laborers and over half the population lives in rural areas, but agriculture accounts for just 17 percent of its gross domestic product.

Farmers around the country have been pressing for more government assistance, often through protests.

Five were killed in Madhya Pradesh state last week when police fired on a group of protesting farmers.

However, India’s central bank governor last week criticized moves to write off agricultural loans, saying they undermined the market and hit private lenders.