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Modi increases compensation for farmers to ease rural discontent

NEW DELHI (Reuters) - Prime Minister Narendra Modi on Wednesday announced higher compensation and government aid for farmers who are suffering due to unseasonable rains, in an attempt to calm growing discontent among people living in the countryside.

A farmer stands in his wheat field, which was damaged by unseasonal rains, at Vaidi village in Uttar Pradesh, March 25, 2015. REUTERS/Anindito Mukherjee/Files

Storms have badly damaged crops in large parts of northern India and led to anger against Modi for not doing enough to help those in distress. Dozens of farmers have committed suicide in recent weeks.

Discontent among people in rural areas, where 70 percent of India’s 1.2 billion people live, could hurt Modi’s political ambitions as he tries to consolidate power in upcoming state elections.

On Wednesday, Modi said his government will increase the compensation provided to affected farmers by 50 percent, as well as bring down the threshold of crop damage that allows farmers to seek government assistance.

“The government’s current (compensation) parameters are not enough to help the farmers,” Modi said at an event in New Delhi.

“The government is committed to help farmers as much as possible.”

The amount of compensation paid currently depends on crop variety and the state where it is being grown. While this monetary benefit would rise, farmers will be able to seek aid even if 33 percent of their crop is damaged, as opposed to more than 50 percent currently.

Unseasonable rains this year have damaged over 10 million hectares (24.7 million acres) of crops, but the government says that has no clear link to farmer suicides.

Debt-laden Indian farmers were already suffering because of low rural incomes and weak global food prices.

Modi said Indian banks have been asked to help farmers restructure their loans, while insurance companies will also step in with support.

“Banks, insurance companies, central and state governments will join hands to get farmers out of this crisis situation,” he said.

Reporting by Manoj Kumar and Rajesh Kumar Singh; Writing by Aditya Kalra; Editing by Simon Cameron-Moore