BANGALORE: Indebtedness is one of the major factors for farmers' suicide and the agrarian crisis in the State. As many as 61.6 per cent of farmer households are indebted in the State against the national average of 48.6 per cent.

It is estimated that the livelihood of 60.4 per cent of rural households in the country is agriculture. Indebtedness is highest in Andhra Pradesh (82 per cent), followed by Tamil Nadu (74.5 per cent) Punjab (Punjab 65.4 per cent), Kerala (64.4 per cent), Karnataka (61. 6 per cent) and Maharashtra (54.8 per cent), according to the first survey of farmer households conducted by the National Sample Survey Organisation (NSSO, 2005).

In other States

The study found that in Haryana, Rajasthan, Gujarat, Madhya Pradesh and West Bengal, 53 per cent of farmer households were indebted. States with very low percentage of indebted households were Meghalaya, Arunachal Pradesh and Uttaranchal (less than 10 per cent).

Of an estimated 43.4 million indebted farmer households, 2.4 million were in Karnataka. The indebtedness of farmer households among social groups in the State was highest among Other Backward Classes (44 per cent), followed by "others groups" (28 per cent), Scheduled Castes (18 per cent) and Scheduled Tribes (10 per cent).

In Karnataka, 43 per cent of households of farmers in the OBC category, 36.4 per cent of those in the "other groups" category, 10.8 per cent households of farmers from Scheduled Castes, and 9.8 per cent of Scheduled Tribe farmer households are indebted.

Almost 80 per cent of indebted farmer households in the country owned two hectares of land or less. In Karnataka, 73.5 per cent of farmer households who owned two hectares or less are in debt. More than 50 per cent of farmers had taken a loan.

How loans are used

Of every Rs. 1,000 taken as loan by a farmer household in the State, Rs. 682 is spent on farming, Rs. 98 on non-agricultural business, Rs. 56 on household expenditure, Rs. 74 on marriages and ceremonies, Rs. 6 on education and Rs. 84 on medical and other expenditure.

Average outstanding loan

The average amount of outstanding loan per farmer was highest in Punjab at Rs. 41,576 against the national average of Rs. 12,585. Punjab was followed by Kerala (Rs. 33,907), Haryana (Rs. 26,007) and Andhra Pradesh (Rs. 23,965) and Karnataka (Rs. 18,135).

Dependence on moneylenders, inefficiency of agricultural extension agencies and lack of awareness among farmers about government schemes made agriculture unprofitable to a majority of farmers.

The survey found that banks were a major source of loans (50 per cent) followed by moneylenders (20 per cent), cooperative societies (16.9 per cent), relatives and friends (6.8 per cent), traders and government agencies (1.9 per cent each).

However, the survey revealed that 34 per cent of indebted farmer households borrowed from moneylenders. Thirty-two per cent took loans from banks and 23 per cent from cooperatives.

Seventy-one per cent of farmers were unaware about the minimum support price scheme, and 57 per cent of farmers had no knowledge about the crop insurance scheme.

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