NEW DELHI, July 1:India's Prime Minister Manmohan Singh on Saturday announced an $835-million relief package to aid farmers in the country's main cotton belt where crippling debts and falling prices have led to thousands of suicides.

Singh announced the Rs37.5-billion programme at the end of a two-day tour of the Vidarbha region of western Maharashtra state where falling world prices of cotton, along with spiralling debts, have contributed to an agricultural crisis.

The immediate action must be to restart the process of credit flow so that farmers can resume normal agricultural activities and obtain a regular livelihood, Singh told farmers in Nagpur city.

For this we need to address the issue of debt relief ... The entire overdue interest (to state-owned co-operative banks) will be waived and all farmers will have no past interest burden as of today, the Press Trust of India quoted him as saying.

Singh said the interest worked out at Rs7.1 billion ($154m).

The overall relief package also included fresh credit flows, rescheduling of loans and irrigation projects.

Federal government officials say more than 8,900 farmers have committed suicide since 2001 in the four states hardest hit by the ongoing crisis, including 980 in Maharashtra.

The number has been dismissed as far too low by activists and, according to a state government-backed report, more than 4,100 farmers ended their lives in Maharashtra in 2004 alone.—AFP