Farmers Indebtedness in Punjab An Empirical study of Malwa Region

Abstract

No doubt the outreach of farm resources in general and credit in particular has tremendously increased in the Punjab state since the last few decades. The main aim of increasing farm credit is to provide timely availability of farm resources such as farm inputs, farm machinery etc. for the development of agriculture sector in the state. Besides these developments, the farmers of the Punjab state have been trapping in severe debt which is the most important matter of concern for the state economy in the context of securing the livelihood of farming community in the Punjab state. Due to debt, many suicides of farmers have been reported in the various parts of the Punjab state during the last few decades which is again make this issue very sensitive. Therefore, it is need of the hour to understand the economic aspects of the credit structure of the farmers on account of drawing some sustainable solution for farm indebtedness among farmers in the Punjab state. newlineIncreasing debt burden and incidence of suicides among farming community are the serious causes of concern in the field of agriculture in Punjab state. Therefore, it becomes very important to examine the different factors that affecting the level of indebtedness among farmers. newlineThe level of indebtedness on per acre basis was taken as dependent variable in the model, while income from secondary sources (Rs/acre), income from farming (Rs/acre), age (years), education (schooling years), family size, farm area (acres), share non-intuitional loan (%) and institutional loan (Rs/acre) were included as independent factors in the model. newlineThe distress level of sample farmers were computed by taking into account the level of income, household expenditure and level of loan borrowed from different sources. The distress level of the sample farm households were classified into two groups named as low distress and high distress level. The amount left after deducting the total household expenditure and total loan from the total family income is regarded as the distress amount.