Debt Distress and its Impact on Farmers’ Lives

Objective: The present study has tried to develop a thorough understanding of why Indian farmers borrow; the effectiveness of loan waiver announcements; and their impact on farmers’ lives; and more critically on farmers’ suicides. The Study has also highlighted the “other” factors, which act behind the curtain, but, have a great influence.

Methods/Analysis: The Study is explorative in nature and takes a descriptive form. It has looked into the reasons that have led to farmer distress, the relationship between debt and farmer distress, which culminates to suicides, and the impact of loan waiver on this process, using secondary data.

Findings: The study found that there is no concrete connection between farm loan waivers and farmers’ suicides, and farm loan waivers do not necessarily result in reduction in farmers’ suicides, and largely, are an electoral agenda. There are various “other” factors, contributing to farmers’ debt distress, forcing them to commit suicide, as a last resort, which is not accounted for, at large. These factors include environmental degradation, education expenditures, and health issues and related expenditures.

Policy suggestions: Farm loan waivers need to be supported with augmentative and alternative models to make them a success. These augmentative models include Debt-Swap, Encouraging Food Processing Industry, Alternate Sources of Income and Organic Farming and strategies such as KALIA and can be used as an alternative model to farm loan waiver.