Magnitude and determinants of indebtedness among farmers in border areas of Punjab
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Date
2022
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Punjab Agricultural University, Ludhiana
Abstract
The present study analyzes the magnitude and determinants of indebtedness among farmers in border areas of Punjab in accordance with purpose and source of debt across various
categories of farmers. A total sample of 80 farmers covering four blocks and eight villages of Pathankot and Tarn Taran districts of Punjab were taken to meet the stipulated objectives of
the study. There are about 5 persons in the farm family. Irrigation with tube-wells is the predominant practice. Various land categories i.e. marginal, small, semi-medium, medium
and large farms depicted average operational area of 1.75 acres, 3.34 acres, 7.68 acres, 14.05 acres and 29.40 acres, respectively. The income derived from farm activities was around 75 per cent of the total household income (Rs. 973618). Overall, 84 per cent of the farm households were indebted in border areas of Punjab and average debt per farm household was
estimated at Rs. 6.33 lakh. Institutional sources are the foremost source of debt with around 90 per cent share in total household debt. Amongst the institutional sources, government
banks were the major source with 48.99 per cent of the total debt. Out of the total debt, 67 per cent was used for productive purposes. As evident from the findings, farmers usually take
loan at rate of interest of 5 to 7 per cent. In conclusion it is implied that one-third of the farm households took loan to meet social and consumption purposes. The share of non-institutional
loan is the highest among smaller farm size categories. Hence, cooperative societies should be promoted to reduce the dependency of farmers from non-institutional sources of credit.
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Citation
Jaspreet Singh (2022). Magnitude and determinants of indebtedness among farmers in border areas of Punjab (Unpublished M.Sc. thesis). Punjab Agricultural University, Ludhiana, Punjab, India.