LONDON (AFP) - Free-trade development strategies designed by theInternational Monetary Fund (IMF) and the World Bank have devastated poorcountries and left their farmers worse off, a British aid group said in areport.

The hardline policies of liberalization and privatization, backed byBritain and other Western governments, have led to a suicide "epidemic"among Indian farmers and inflicted terrible social costs in otherdeveloping countries, Christian Aid said.

In its report, the London-based group urged Prime Minister Tony Blair touse Britain's temporary presidency of the G8 group of leading industrialcountries and, from July, of the European Union to "bring about a radicalchange of direction" in development policy.

"It is a scandal that the British government has backed policies andpumped British taxpayers' money into schemes which have contributed topoor Indian farmers killing themselves and Indian workers being laid offin huge numbers," Christian Aid director Daleep Mukarji said in astatement.

Three case studies in the report illustrate the costs of what the grouptermed the "free market credo": in India, the crop farmers are driven tosuicidal despair; in Ghana, it has crushed poultry producers andthreatened democratic institutions; and in Jamaica sugar cane productionhas plummeted, sending women into drug-running and prostitution.

When the IMF and World Bank stepped in to help India in 1991, theyencouraged the government to devalue the rupee in a bid to boost exports,while farmers were told to produce cash crops for export, like cotton andsugar, at the expense of staple crops like rice and wheat.

But the move pushed farmers into debt, as they borrowed money to pay forseeds, fertilizers, pesticides, water and power while state subsidies onfertilizers and other needed products were cut.

Meanwhile, liberal banking reforms meant that interest rates grewunchecked, making it harder to get loans and easier to have propertyseized when farmers could not pay back debts.

Emphasis on exports, of both cash crops and staple foods, led to a sharpdecline in food stocks for domestic consumption and increased hunger athome, Christian Aid said.

Furthermore, under IMF-inspired measures, India gradually withdrewmeasures protecting its market from cheap, subsidized foreign palm oil,which in turn caused the crash of India's production of oilseed.

"So debt rises, heaping misery on poor farmers to such an extent that manytake what they see as the only way out: suicide," the report concluded.

In the state of Andhra Pradesh suicide rose from 200 in 1999 to 2,115 lastyear, with nearly 4,400 suicides recorded since 1998, according to asurvey quoted by the group.

Britain played its part in worsening the farmers' plight, investingmassively in Andhra Pradesh's development and hiring the right-wingfree-market Adam Smith Institute to help privatize state-run corporations,it said.

Christian Aid also pointed to the state of "gradual collapse" of thepoultry industry in Ghana, where, under IMF pressure, the finance ministeroverturned a law in March that had tried to protect the sector byincreasing duties on imports of chicken and rice.

Jamaica, the non-governmental organization said, also faces a crisis asits agricultural sector continues to slide without any other industryproviding sufficient job replacements.

Christian Aid warned that even more layoffs are to come as European tradereforms come into effect that will see prices for Jamaican sugar -- itsmain export -- cut by 37 percent by 2008.

"There is no social safety net here," Marie Freckleton, a Jamaicaneconomist, was quoted as saying. "When large numbers of people are thrownout of work they are more likely to become drug dealers or prostitutes."

Christian Aid called on Blair's government to bar British aid from beingtied to development policies focused on liberalization and privatization,saying its link to the crises detailed in the report was "a source ofregret and shame".