Half of farmers in debt

Almost half of farmer households in India are indebted, with the degree of indebtedness being fairly high in the relatively better-off states like Andhra Pradesh, Tamil Nadu and Punjab, according to the National Sample Survey Organisation.

The first-ever situation assessment survey of farmers, undertaken by the NSSO, as part of its 59th round survey, shows that about 48.6 per cent of the farmer households in the country were indebted.

That means that 49.3 million out of the total of around 210 million households and out of 89.3 million farmer households in the country were indebted in 2003.

In Andhra Pradesh, 82 per cent of farmer households are indebted, followed by 74.5 per cent in Tamil Nadu. Punjab reported 65.4 per cent indebtedness among farmer households.

At the bottom end of the scale is Meghalaya where only 4 per cent of farmer households are indebted, while in Arunahcal Pradesh, the figure is 6 per cent. Uttaranchal has 7 per cent indebtedness in this category.

In absolute terms, of an estimated 43.4 million indebted farmer households, more than half belong to five states. Uttar Pradesh topped the list with 6.9 million, while 4.9 million belonged to Andhra Pradesh, 3.6 million to Maharashtra, 3.5 million to West Bengal and 3.2 million to Madhya Pradesh.

The average outstanding loan per farmer household is the highest in Punjab, followed by Kerala, Haryana, Andhra Pradesh and Tamil Nadu, says the survey report.

The report deals with indebtedness among farmer households. It defines indebtedness as having a liability in cash or kind, with value of more than Rs 300 at the time of transaction.

More than half of indebted farmer households have taken loans for the purpose of capital or current expenditure in farm businesses, says the report. Marriages and ceremonies are the next major cause of indebtedness, accounting for about 11 per cent of outstanding loans.

The most important source of loans, in terms of percentage of outstanding amount, is banks, with a 36 per cent share of the total, followed by moneylenders, who have a 26 per cent share.

The report also finds the degree of indebtedness relatively higher among scheduled castes and other backward castes while farmers from scheduled tribes are relatively better-off than those in other categories.