The Prime Minister, along with the Agriculture Minister Shri Sharad Pawar, the Minister for Minority Affairs Shri A. R. Antulay, the Finance Minister Shri P. Chidambaram, the MOS [PMO] Shri Prithviraj Chavan and Member Planning Commission Dr. Abhijit Sen, met a delegation led by Shri Mohan Dharia in connection with the demands raised by them relating to the farming community. The delegation consisted of (i) Shri Bapusaheb Deshpande, (ii) Dr. Budhajirab Mulik, (iii) Shri Prakash Phoare, (iv) Dr. Mukund Ghare, (v) Shri Narayanrao Somvanshi.

Shri Dharia re-iterated three the demands which were of concern to him and had been raised by him earlier in a letter to the Prime Minister. The demands were (i) immediate writing off of debts of all farmers with a land-holding of less than 2 hectares; (ii) declaring debts taken from illegal money lenders as illegal and providing police protection to farmers, and, (iii) bringing down the rate of interest on farm loans to 4%. Shri Dharia and the delegation members gave a detailed account of the difficulties being faced by many sections of farmers and the need for acting on his demands immediately. Shri Dharia also indicated his decision to go on an indefinite hunger strike from 14.11.06 for the immediate fulfilment of these demands.

The Prime Minister empathised with Shri Dharia on the issues raised and stated that he was as concerned as they were about the problems being faced by farmers in many regions. He pointed out that he has been stating this repeatedly in many fora including in his Independence Day address to the nation this year and in his address to the Agriculture Summit a few days ago. He mentioned that he had been giving serious thought to this matter ever since he visited Vidarbha in July where he had announced a relief package for districts affected by a high level of farmers' suicides. It was this concern, he said, that prompted him to announce the setting up of an Expert Group to look into the problem of agricultural indebtedness. This Expert Group was constituted immediately after his visit to Vidarbha and is headed by the renounced economist Dr. R. Radhakrishna. This Group has been assigned the specific task of examining the indebtedness problem in all its dimensions and come up with its considered suggestions by 30.11.06, which is just a month from now. In addition, the Reserve Bank of India has Technical Groups working on improving the existing framework governing money lending and also expanding financial inclusion so that no genuine borrower is denied access to institutional credit. The Prime Minister mentioned that a few days ago, he had constituted a Committee under Dr. Hanumantha Rao consisting of Prof. V. S. Vyas, Prof. Vaidyanathan, Dr. G. S. Kalkat and Dr. Abhijit Sen to suggest concrete measures for incorporating the recommendations of the Farmers' Commission in the 11 th Five Year Plan.

The Prime Minister also pointed out the specific steps that had been taken by this government so far to improve credit facilities for farmers including the doubling of agricultural credit in three years, re-scheduling of farm loans, interest relief of 2% on outstanding crop loans, the reduction in the interest rates for short term crop loans to 7%, the special package for suicide affected districts and the restructuring of the cooperative banking system through Rs. 14,000 crore package.

While agreeing that the issues raised by the delegation are of great importance and urgency and that he recognises the importance of an early decision on these matters, the Prime Minister emphasised that decisions on such important issues, particularly on debt waiver, have far reaching implications on the banking and financial system of the country. In the long run, the stability of the banking and financial system of a modern economy cannot be compromised and any solution would have to factor this in. Further, the Prime Minister stated that he recognised that problems faced by farmers living in chronically drought prone and flood prone areas deserved special attention. Even then, the problems of farmers are not uniform across the country. They vary from region to region, from state to state, from crop to crop, from land holding to land holding, from irrigated land to dry land farms etc. There could be no 'one-size-fits-all' solution. Further, decisions would have to be based on a proper analysis of facts and data so that their implications are well known in advance. It is this task, which has been given to the expert group under Dr. Radhakrishna which is due to finish its work in a month.

Against this background, the Prime Minister requested Shri Dharia to nominate his representatives to interact with both Dr. Radhakrishna's group and Dr. Hanumantha Rao's group so that their inputs are duly taken into account when they frame their recommendations. The Prime Minister, while reiterating his sincere concern for the problems of farmers, requested Shri Dharia earnestly to refrain from going on a hunger strike from 14.11.06 which could only precipitate the matters. He requested Shri Dharia to wait for the final reports of the Expert Groups which are due shortly and the action which the government would take subsequently before embarking on such a course of action.