Farmers’ debt rises to Rs 69,355 crore: Survey

Sarbjit Dhaliwal

Tribune News Service

Chandigarh, January 22

Farmers’ total debt in the state has gone up to Rs 69,355 crore. Of it, Rs 56,481 crore was borrowed from institutions. Till March 2013, the amount of institutional loans was Rs 52,000 crore.

This is a finding of a survey conducted on behalf of the Indian Council of Social Sciences Research (ICSSR). A team of Punjabi University teachers headed by Dr Gian Singh, Professor of Economics, conducted the survey. Its other members were Dr Anupma, Dr Gurinder Kaur, Dr Rupinder Kaur and Dr Sukhvir Kaur. Except Dr Gurinder Kaur, who is from the Geography Department, the others are from the Economics Department.

Apparently, institutional loans have gone up with little or no change in the amount of non-institutional loans. Marginal, small farmers and landless labourers, who have not got adequate assets to mortgage, are more dependent on non-institutional sources for securing a loan.

Debt per household has gone up. For marginal farmers with up to 2.5 acres, it has been pegged at Rs 2,76,839 and for small farmers with up to 5 acres, debt is Rs 5,57,338.

For semi-medium farmers with up to 10 acres, debt per household is Rs 6,84,649. In case of medium farmers owning up to 15 acres, debt per household is Rs 9,35,608 and in case of large farmers it is Rs 16,37,473.

Among marginal and small farmers, 83.3 per cent and 88.64 per cent farmer households are under debt, respectively. In case of semi-medium and medium farmers, the figure is 89.06 per cent and 84.09 per cent, respectively. Nearly 82.61 per cent of large farmers are under debt with the state average of households under debt being 85.9 per cent. The average debt per household is Rs 5,52,064.

A large number of landless labourers in the farm sector are under debt. The average household loan is Rs 68,330 with 80 per cent households of landless labourers under debt. Near 92 per cent landless labourers secure loans from non-institutional sources.

It was noted that large farmers were not so heavily dependent on non-institutional loans. Against 8.16 per cent large farmers, 40 per cent marginal farmers take non-institutional loans. Meanwhile, 30 per cent small farmers and 14.47 per cent medium farmers take non-institutional loans. This is a danger for small farmers as private moneylenders charge exorbitant rate of interest and exploit them.

Dr Gian Singh said the other worrying fact was that to raise the cash credit limit, farmers mortgaged more land almost every year to banks and other official institutions. However, the positive aspect was that the loan taken was by and large used for productive purposes.