Magnitude and Determinants of Indebtedness Among Farmers in Punjab

The ongoing agrarian crisis in Punjab is becoming a centrestage issue as the farmers are reeling under debt arising from stagnant productivity and low profitability. The total debt burden on Punjab farmers is estimated to be Rs. 22943 crores and the debt per farm household is Rs. 218092. The level of education, non-farm income, farm size and non-institutional credit were the main factors which affect the level of farmers’ indebtedness. The farmers face a large number of problems in availing institutional credit which drives them to fall into the debt trap of the crafty and exploitative non-institutional sources of credit. There is a need to strengthen the existing credit delivery system to accelerate growth of the farming sector for evacuating the peasantry from the incessant debt trap.