The Union Minister for Panchayati Raj, Mani Shankar Aiyar, was recently in Nagpur to attend a conference. He volunteered to visit Koljhari, Bodhbadhan and Waiphad villages that witnessed many farmer suicides. At Waiphad, he met with a group of farmers and farm labourers who were eager to talk to him. "The loan waiver package hasn't been of much help to us. Now what does the Sixth Pay Commission have in store for farm labourers?" one of them asked. A surprised minister did not get what exactly he meant. The farm hand explained that labourers in the region wanted to be included in the lowest rung of the Pay Commission, i.e. the wages. given to a farm hand should be equal to the minimum wages in the Pay Commission's recommendations. Aiyar assured them that he would convey the demands to the decision' makers in New Delhi. It is more or less clear now. More than half the debt-ridden farmers in the Vidarbha region will not benefit from the much-hyped loan waiver package in P. Chidambaram's Kisan Budget. Reason one: those who own more than two hectares are not eligible for the waiver. Two: most of the marginal farmers have taken loans from local money lenders, which are not covered by the waiver. "This package has waived lakhs of rupees borrowed by grape and cane growers just because they have small land holding. On the other hand many deserving people have been left out just because they own more than two hectares. Isn't it a great irony?" asked Vijay Javandhia, leader of the farmers' organisation Shetkari Sanghatana. Javandhia's concern is not baseless. Consider Dorli in Wardha district. THE WEEK had reported how the village had been put up for sale by its residents. Dnyaneshwar Jarunde, a farmer from Dorli, owns 18 acres and has borrowed Rs 45,000; Saraswati Usate, another villager, has 17 acres and has borrowed Rs 60,000; Ganesh Gondane has 11 acres and a loan of Rs 25,000. Of the 39 farmers in the village, only 13 will benefit from the waiver. Others have the option of one-time settlement: pay 75 per cent of the loan at one go and close the account. Said Javandhia, "The Budget has been completely unjust to the dying farmers of Vidarbha. Farmers in western Maharashtra, who have small land holdings, will get a waiver for Rs 5 lakh loans, but a Vidarbha farmer who has 18 acres and a Rs 50,000 loan won't get it." The state unit of the Congress is planning to request the Central government to raise the ceiling from the current two hectares. Pradesh Congress Committee president Prabha Rau has already demanded that the ceiling should be raised to 15 acres. The situation is not different elsewhere in the country. In Bundelkhand, where severe drought and suicide by farmers raised much hue and cry, more than three lakh farmers will not benefit from the loan waiver as they have larger land holdings. Their cumulative loan amounts to Rs 11,000 crore, about one-sixth of the waiver package. According to the National Sample Survey Organisation, indebted farmers had borrowed more than 42 per cent of the outstanding amount from sources ranging from money lenders to relatives. Also, marginal farmers who own less than two acres do not get loans from formal credit institutions in the state. "It is an issue of contention whether this farmer actually borrows from financial institutions. They have to borrow from private sources," said Dr Ajay Dandekar, a research scholar in development studies. In Uttar Pradesh, a whopping 46 per cent of the indebted farmers have taken loans from local money lenders. "This waiver is not a solution. Until and unless the government comprehends why a farmer falls into this lethal debt trap, and corrupt practices ailing the loan system are dealt with, the problem will continue to exist," said farmers' leader Mahendra Singh Tikait. Political parties in the state were also quick to point out the shortcomings of the waiver package. "Budgetary measurers of the UPA government are far from ground reality. The relief and concessions given by the Central government would have been more meaningful had they been given in the very first year after the formation of the UPA government," said Uttar Pradesh Chief Minister Mayawati. Samajwadi Party leader Amar Singh termed the loan waiver an eyewash. "The measures will be implemented in the next three years, whereas general elections are due next year," he said. The Centre has identified 31 districts across the country that had witnessed the highest number of farmer suicides. Sixteen of them are in Andhra Pradesh, six each in Maharashtra and Karnataka and three in Kerala. In Andhra Pradesh, which had witnessed a large number of farmer suicides, about 60 per cent of the over one crore debt-ridden farmers will benefit from the waiver. The state will receive about Rs 12,000 crore, accounting for 20 per cent of the package. However, the plight of small farmers, who remained outside the purview of financial institutions, is the same here. "The marginal farmer does not get any loan from any institutional sources and so the loan waiver will not benefit him, said E. Revathi, fellow at the Centre for Economic and Social Studies which had conducted studies on farmer suicides in Mahboobnagar, Anantapur, Warangal and Guntur districts. Pricing of the produce, not the credit, is often the real issue. "Farmers should get a price that is above the cost of production. This is the area where intervention is needed the most. When the central government announces the Sixth Pay Commission, a farmer's income should be at par with that of a village school teacher. This can be achieved only by giving a better price to farmers," said Dandekar. Pushpendra Bhai, who leads the farmers' movement in Bundelkhand, said, "The waiver is a temporary move and will not eradicate the prob lem of farmers' debt. In 1990, some Rs 8,900 crore of agricultural loans were waived off, but it did not solve the problem." Javandhia suggested some changes in the loan waiver package to make it more effective. "Instead of the two-hectare ceiling, the waiver should be announced in the bracket of Rs 50,000-Rs 100,000. This will ensure that 90percentof the farmers become debt free. And to ensure that the farmer does not fall prey to the debt trap again, the Commission for Agricultural Costs and Prices should increase the prices of agricultural produce by 30-50 per cent," he said. Arguably, the loan waiver was the most generous financial offer ever from the government to the farmers. However, its failure to provide any real comfort also highlights the farmers' inaccessibility to institutional credit. As much as it shows the acute agrarian crisis in India.