Indebtedness among Marginal and Small Farmers in Rural Punjab

The present paper is an attempt to examine indebtedness among the marginal and small farmers in rural areas of Punjab. The study revealed that85.46 percent of the marginal and small farm households in the rural areas of Punjab were under debt. The average per sampled household debt was `336272.39. The average per sampled farm household debt is found to be more in the case of small farm-size category as compared to the marginal farm-size category. The debt per acre was inversely related to farm size. An average sampled farm household incurred 66.29 percent of the total debt from the institutional agencies. The share of institutional agencies in the total debt increased with the increase in farm size. Due to the application of New Agricultural Technology, the marginal and small farmers borrowed funds mainly for growing crops. These farmers were unable to meet their consumption expenditure with their income. To fill this gap these farmers also borrowed for family maintenance. The analysis clearly brought out the fact that the marginal and small farmers were partly dependent upon the commission agents and money-lenders who charged exorbitant rates of interest.