Agrarian distress and indebtedness in rural India: Emerging perspectives and challenges ahead

This paper explores agrarian distress and indebtedness among farmers in India. The study is based on the state level data obtained from the 59th round survey of National Sample Survey Organisation (NSSO) conducted in agricultural year 2002 to 2003. The study aims to analyze the pattern of indebtedness and causal factors behind it. The research concludes that the major factors that lead to indebtedness are the instability in food grain yield, level of yield / net returns and the cost of cultivation. Statistically, the rising cost of cultivation and diminishing net returns came out to be significant with the incidences of indebtedness. The states having high level of agricultural development are characterized by high incidence of indebtedness. Most of the indebted farmers belong to the small and marginal categories but the states where the degree of commercialization is high, the incidence of indebtedness is found high among the semi-medium and medium farmers. The present agricultural credit system is abysmal and the farmers are not getting the appropriate price for their crops. This situation demands urgent attention of the government, policy makers and planners to save the farmers from committing suicide and to re-boost the agricultural economy of the country.   Key words: Agrarian distress, indebtedness, food grain yield, net returns, commercialization.