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Agricultural Indebtedness in Andhra Pradesh


T. Lavanya



Indian Journal of Economics and Development
Year : 2016, Volume : 12, Issue : 1a
First page : ( 323) Last page : ( 328)
Print ISSN : 2277-5412. Online ISSN : 2322-0430.
Article DOI : 10.5958/2322-0430.2016.00084.6

Agricultural Indebtedness in Andhra Pradesh

Lavanya T.*
Department of Agricultural Economics, College of Agriculture, Professor Jayashankar Telangana State Agriculture University (PJTSAU), Rajendranagar, Hyderabad-50030

*Corresponding author’s email:

JEL Codes C81, Q01, Q18

Online published on 26 April, 2016.

One of the perennial evils prevailing in the Indian agrarian economy has been the rural indebtedness. The Indian farmer who is traditionally poor resorts to loans not only to meet the expenditure on his farming but also on his family. He has been borrowing from whatever source available and due to various reasons the farmer is not in position to repay the loan. The debt gets accumulated and he is trapped into indebtedness. The agricultural indebtedness was growing steadily and assumed serious proposition which caused grave concern to the farmers and administrators. In order to examine the indebtedness, the study was undertaken in three districts of Andhrapradesh namely Guntur, kadapa and Warangal representing three regions of Andhra Pradesh. Data was collected from 180 farmers through personal interview method. The magnitude of the debt has increased with increase in size of land holding and average debt of sample farmers was V, 95, 700. Debt asset ratio was high with 1.67 on small farms compared to medium and large farms. Nearly 71.8 per cent of total debt was incurred for productive purpose and 28.2 percent for consumption purpose. Crop loan accounted for 57.75 percent of total productive debt followed by other purposes. Source wise debt revealed that 54 per cent of total debt was owed to non institutional agencies and 46 per cent to institutional agencies. Crop failure, high cost of cultivation dependence on private agencies high interest rates inadequate irrigation facilities, low income, inadequate marketing facilities are reasons for the indebtedness as expressed by the sample farmers. Regression analysis revealed that farm expenditure was found to be positively influencing the indebtedness in all size groups of farmers. Various aspects of credit provided by both public and private sources revealed that accessibility to institutional credit was very limited particularly in case of small farms. Provision of adequate irrigation facilities, enhancement of crop loan component, provision of market finance, suitable legislations for curbing the activities of moneylenders and enactment of comprehensive and fool proof of Agricultural indebetness Act are some of the measures suggested to tackle the problem of Agricultural indebtedness.

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