Rs.60,000 Crore Farm loan waiver – Is it a long term solution?.

The sixty thousand crore rupees of farm loan waiver scheme announced by the finance minister in the Budget 2008 is currently one of the most discussed topic in India. How is this scheme going to really help the farmers? Is it going to help farmers tide over their financial problems completely and permanently?
The government boasts that this scheme will help reduce the farmer’s suicide. One interesting article in Economic times newspaper gave statistics that farmers suicide in Vidarbha are not because of farm loans, but because they are suffering from Syphilis and Gonorrhoea – both sexually transmitted disease.
The provision of the scheme is applicable to farm loans that were overdue as on 31^st December’07 and not paid till 29^th February’08. Farmers who were honest and made sincere attempts to replay their loans goes cheated. If waivers after waiver are given to farmers, will they ever consider repaying their loans? The politicians will have no choice but to come out with similar schemes before every election.
The same analysis also made a mention that banks are always under pressure to disburse loans to farmers who are close to politicians. The same will be the case for waiver as well. Soon we will see Bank officers committing suicide.
Instead of loan waivers, can’t the government invest this Rs.60,000 crores towards development of agriculture in the long term? It can spend this money on research and development of agriculture, modernization of cultivation methodologies, development of irrigation feasibilities by integration of rivers or by other feasible means, educating farmers on use fertilizers, crop rotation, etc etc, Interestingly I read news in Hindu that the State Agriculture Department created a record of producing more that 10 tonnes of paddy per hectare by adopting the System of Rice Intensification (SRI) as against the average production of 4-5 tonnes. Why is the government not taking initiatives to help farmers adopt similar system and help them improve their farm productivity in the long run, rather than waive loans and provide temporary relief and also cultivate an habit in farmers not to pay their loans, or for that matter encourage farmers to commit suicide for the purpose of availing farm loan waiver.