Agri debt burden

INDIA’s farm sector is at a paradoxical juncture. On the bright side, the Central government highlights record foodgrain production, digital transformation and expansion of credit access. However, new data reveals a harsh truth: the nation’s celebrated “food bowl” states, Punjab and Haryana, are among the most indebted in the country. With outstanding loans of Rs 2.03 lakh and Rs 1.83 lakh per agricultural household, respectively, Punjab and Haryana are ranked third and fourth in farm debt (the national average is Rs 74,121). Only Andhra Pradesh and Kerala have reported a higher debt burden. The contrast with states such as Nagaland, Meghalaya and Arunachal Pradesh — where farm debt is negligible — reveals deep structural imbalances in Indian agriculture.

High indebtedness in Punjab and Haryana is not accidental. Both states spearheaded the Green Revolution, embraced input-intensive farming and became the backbone of India’s food security. But that model has been under great strain in recent decades. Rising input costs, stagnant farm incomes, small and fragmented landholdings, erratic monsoons, procurement delays and mounting household expenditures have established a cycle of credit dependency. Easy access to institutional loans has spurred productivity, but it has also normalised borrowing as a means of survival.

The Centre claims that it is prioritising farmers’ interests. The rollout of AgriStack, digital IDs for 8.48 crore farmers, geo-referenced crop surveys and streamlined direct benefit transfer promise efficiency and transparency. The RBI’s proposed revamp of the Kisan Credit Card scheme — aligning loan tenures with crop cycles — signals recognition that credit must evolve with changing farm realities. Technology and better-designed credit are welcome steps, but they alone cannot alleviate deep-rooted distress. If incomes do not keep pace with costs, if crop diversification remains dormant, and if climate change intensifies, debt will persist — no matter how efficiently loans are disbursed. The onus is on the Central and state governments to lift the all-important annadata out of the crippling debt trap.