Is former Member of Punjab Public Service Commission
A farmer and keen observer of current affairs
Western countries have long been generous hosts, offering Indian immigrants prosperity, safety, and freedom. But this generosity is now being tested—not just by economics or legality, but by behaviour. The core issue is simple yet profound: a failure to keep religion and culture private rather than public. When cultural practices spill into the public s…
Permanent Solutions for Agricultural Debt in Punjab
Punjab, despite accounting for only 1.5 percent of India’s geographical area, contributes a staggering 60 percent to the country’s food grain production. The state produces 16 percent of India’s wheat, 11 percent of rice, 8.4 percent of cotton, and 7 percent of textiles. Yet, paradoxically, farmers in Punjab face crippling debt, averaging ₹2,03,249 per household. Andhra Pradesh follows closely with ₹2,45,554, while Haryana stands at ₹1,82,922 per household.
Punjab has the highest proportion of large farmers in the country, at 7 percent, whose holdings exceed 25 acres. In comparison, the national figure for such large farmers is only 0.7 percent. Conversely, the state has the lowest proportion of small farmers at 13 percent, whereas small farmers account for 74 percent nationally. Despite the state’s fertile land and agricultural productivity, indebtedness remains a persistent challenge. Even when farm debt is periodically waived, the problem continues because 60 percent of India’s population relies directly or indirectly on agriculture. This highlights the urgent need for a permanent, sustainable solution.
Historically, before 1969, banks extended loans to farmers at minimal interest rates of around 2 percent, but these loans were accessible only to large landholders. In 1969, Prime Minister Indira Gandhi’s ordinance nationalized 14 major commercial banks, mandating them to prioritize agricultural lending, especially to small farmers. This initiative helped reduce the stranglehold of moneylenders and facilitated the Green Revolution. Bank loans, intended for productive use and later converted into assets, came with low interest rates, ensuring that farmers could invest in their land and equipment effectively.
Further, in 1980, six more banks were nationalized with the same objective. Loans were offered at 7 percent interest, with an additional 3 percent rebate for timely repayment. Despite these measures, agricultural debt continues to plague the farming community, contributing to alarming rates of farmer suicides. Surveys by Guru Nanak Dev University, Punjab Agricultural University, and Punjabi University revealed that 9,291 farmers in six districts of Punjab committed suicide between 2000 and 2018, with 88 percent of cases linked to debt. Nationwide, more than 23,000 farmers took their lives between 2009 and 2017. Another report covering 2,400 villages in six Punjab districts recorded 7,303 farm laborer suicides from 2000 to 2019.
While doubling agricultural income may seem difficult, increasing the income of farming households is achievable through professional diversification. Families engaged in a combination of farming, employment, business, or industry often achieve higher earnings, better farming outcomes, and reduced debt. Currently, 60 percent of India’s population contributes just 14 percent to domestic production. If agricultural participation were reduced to 14 percent, household incomes could potentially quadruple rather than merely double.
Thus, the key to permanently addressing farm debt lies in promoting professional diversity within agricultural households, supported by rural industrialization. Encouraging alternative income streams alongside farming can transform rural economies, reduce financial distress, and ensure that Punjab’s farmers thrive sustainably.