The Government package follows a study on `Rural Credit and Indebtedness', which identified economic distress as the main reason for the high rates of suicides among farmers. The study carried out by H S Shergill for the Institute for Development and Communication, a Chandigarh-based research organisation also revealed that the total debt burden of the farmers in the region is around Rs 5,700 crore.

Based on the findings of the study, the Government has decided to grant a loan of Rs one lakh for farmers owning just one acre of land. The limit will be Rs 2 lakh for those having up to five acres of land.

While allthese proposals are being seen as a good start, experts feel that more could have been done. ``What the Chief Minister announced will only add to the problem of debt trap. What is required is the initiative to generate additional income in the farm sector, as of now characterised by diminishing returns,'' says Joginder Dayal, secretary of the Communist Party of India in Punjab.

The problems in the farm sector cannot be seen separate from the social context either. The failure of the village support system is one of the main reasons for the crisis in the farm sector. The study found that out of the total debt incurred by farmers, about 36 per cent was due to ``excessive expenditure on domestic consumption and social ceremonies'' and that it had nothing to do with agriculture.

According to the IDC report, only 18.5 per cent of the farmers cited crop failures and yield fluctuations has the cause for their increasing debt burden. The study also found that of the total debt burden of Rs 5,700 crore, 46.32 percent was to be paid back to commission agents, 27.14 per cent to cooperative institutions and 19.42 per cent to commercial banks.

In spite of this, the Government package takes into consideration only the loans announced by cooperative institutions.