In the name of import reforms, the quality requirements for imported seeds have been drastically lowered. Traditionally germination rates of seeds used to be tightly regulated and the farmers expected that they would be able to re-use part of the harvest as seeds. Lack of mandatory seed quality designation is a problem. Earlier the mandated germination rates were higher than 90% for much of the GM seeds it is 65%, and more expensive.
The market has been flooded with GM seeds with poor germination rates, higher input costs, no re-usability and lacking the pest resistance that was promised. You would find a high correlation with the suicide patterns and introduction of GM varieties like BT cotton.
The agriculture sector used to be served well by the (national and state) banks. That credit has almost but completely disappeared, by way of change in government policy. On the other hand, in Indian cities it is common to be spammed on your cell-phone by banks continuously, for loans that you do not want or need. Same goes for advertisements on TV. So one major factor is mis-allocation of credit. For the banks it makes sense because there is more profit to be made of (defaulting) car loans than loans to agricultural enterprises. With no banks offering loans the farmers usually turn to private money lenders who charge arbitrary and astronomical interests. Most of the lending related suicides have their source here.
The sad part is that this is a decade old phenomena and the average urban Indian has been unaware of it (partly by choice). The popular media did not report it. The movie "Peepli Live" has given the issue much needed visibility.
If anyone is interested a very good resource with analysis and yearly trends etc. is http://www.indiatogether.org/2010/feb/psa-suicides.htm and http://www.indiatogether.org/agriculture/suicides.htm
I am looking forward to peer to peer lending to start in India, much like prosper and kiva.