Studies suggest that farmers use 30% share of loans on domestic needs

According to a recent study, farmers in Punjab who are barely managing their expenses, have been spending around 30% share of their total debt towards meeting their domestic needs, like maintaining families, repairing houses, on health, education and socio-religious purposes.

Professors of Punjabi University Patiala conducted the survey which was sponsored by the Indian Council of Social Science Research, New Delhi. The survey was conducted in several villages of three regions in the state – south-west (Mansa District), central plains (Ludhiana) and Shivalik foothills (Hoshiarpur) – in which farm households have been categorised as marginal, small, semi-medium, medium and large.

As per reports, it has been concluded that though the farmers have incurred major debt for purchasing farm implements, including 72.97 per cent, 69.82 per cent and 61.97 per cent in central plains, Shivalik foothills and south-west regions, respectively. But domestic needs are the second major purpose of debt incurred by marginal farmers (having less than one hectare of land) in all three regions and small farmers (up to two hectares) in the South-West region.

The share of domestic needs in the total debt is around 7% and it ranged from  6.52% and 7.69%  in central plains and Shivalik foothills, respectively, while it is 7.39% in the south-west region and mostly small farmers have borrowed more for this purpose from non-institutional organisations like commission agents, private moneylenders, etc. Also, around 8% of the total debt is owed for the purpose of carrying out house construction by around 12% farmers in the south-west region of 8.17% in the Shivalik foothills and 4.61% in the central plains.

Also, farmers have been spending 6.74% share of their total debt on socio-religious ceremonies. “The field survey has brought out the fact that farmers cannot get alternative employment opportunities. So, they take some land on lease from large farmers to increase the size of their operational land holdings and for that purpose, they also need funds to grow crops but still they were unable to meet the expenditure with their income and taking loans to maintain the families even and the situation is more alarming in case of small and marginal farmers,” said Professor Gian Singh of the Department of Economics at Punjabi University, Patiala, who had conducted this survey along with several other academicians.