The debt burden on Punjab farmers has shot up by a staggering 500 per cent over the past ten years, pushing more marginal farmers out of agriculture. According to a new study by the Institute for Development and Communication (IDC), farm debt in the State rose to Rs.30394.12 crore in 2007-08 compared to Rs.5700.91 crore in 1997, when the first estimates were made following a spate of suicides by farmers, agriculture labour and members of their families.
According to IDC’s Director of Punjab Development Studies, Prof. H. S. Shergill, the farm debt increased five times at current prices and doubled at constant prices of 1997. The study established an average debt of Rs.20,000 per owned acre.
Of the 72 per cent heavily indebted farmers, 17 per cent were under more than Rs.80,000 per acre owned. They were in a “debt trap” what with 60 per cent of them being marginal and small farmers who could not pay even the annual interest on their loans from their current farm income.
Meanwhile, the latest figures with the Government indicate that there has been a considerable reduction in the number of land holdings from 10.93 lakh in 1995-96 to 10.03 lakh in 2005-06, when the number of marginal farmers with less than one hectare holding went down from 2.03 lakh to 1.33 lakh.
The latest study suggests that the per farm household debt had risen from Rs.52,000 to Rs.1.39 lakh, indicating that more farmers from the marginal sections may be pushed out of agriculture in the near future.
The study points out that the minimum support price for the major crops, wheat and paddy, went up by 111 per cent and 80 per cent respectively. A steep rise in farm land prices notwithstanding, the amount of farm debt stood at four per cent of the total value of land under agriculture compared to three per cent in 1997.