Constraints of Financial Resources and Indebtedness

Modern agriculture depends on expensive inputs — chemical fertilisers, high-yielding seeds, pesticides, and irrigation. For a marginal or small farmer, who has little to no savings, this resource-intensive approach becomes unmanageable. The very nature of these inputs forces farmers to spend heavily before they see any return, and that spending is a gamble on a good harvest.

To cope, most small and marginal farmers borrow money. They take credit from institutional sources like banks and cooperative societies, and also from informal lenders — moneylenders who often charge exorbitant interest. This is not a choice born of opportunity, but of compulsion.

When crops fail or market prices crash, the farmer earns too little to repay the loan. The debt does not vanish; it compounds. One bad season leads to another loan, and soon the farmer is trapped in a cycle of indebtedness. The textbook asks two pointed questions that follow from this reality:

• What are the implications of severe indebtedness?
• Do you feel that the recent incidents of farmers’ suicides in different states of the country are the result of indebtedness? …