Analyzing the Debt Behavior of Farm Households in the Maharashtra State of India

Atul Mehta ()
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Atul Mehta: Indian Institute of Management - Shillong, India

Journal of Developing Areas, 2022, vol. 56, issue 2, 107-117

Abstract: The number of farm suicides in India is alarming. While the official data on farm suicides released by National Crime Records Bureau (NCRB) shows a rising trend till 2015, the figure went slightly down from 12,590 in 2015 to 10,338 in 2018. Any increase in the farm suicide cases in India is worrisome because of majority of population’s dependence on agriculture. The report also mentions about the various reasons for farmers committing suicide with bankruptcy being a major cause of suicide among farmers. Considering the dismal state of farm suicides in the Maharashtra state of India, the present study attempts to analyze the debt behavior of the farm households for two time periods viz. 2004-05 and 2011-12. The study uses information on debt behavior of farm households in Maharashtra collected through two rounds of India Human Development Survey (IHDS) survey, which is a nationally representative, multi-topic survey across India. The first round of interviews was completed in 2004-05 and the second round of IHDS re-interviewed most of these households in 2011-12. The sample consists of a total of 1543 households in 2004-05 and 1685 households in 2011-12 in the Maharashtra state. The state of Maharashtra has been divided into 5 divisions viz. Konkan, Vidarbha, Nashik, Pune, and Marathwada. The sample households in the state have been divided based on land ownership and size of land into Agri wage laborer, small and marginal, medium, and large farm households. The debt profile of the households is analyzed using information on the share of indebted households, number of loans taken in the past 5 years, average loan size, outstanding debt, interest rate on the largest loan, debt-servicing capacity, debt-to-income ratio, consumption-income ratio, etc. The study also attempts to identify the key factors that are likely to have contributed to the highest number of farm suicides in Maharashtra and also provides policy suggestions for the government. The comparison between the two time periods not only helps understand what went wrong with the finances of farmers during the study period but also helps us identify the factors which may result in farmers taking such extreme steps in the future.

Keywords: Farmer Suicide; Maharashtra; Debt Behavior; IHDS; Bankruptcy (search for similar items in EconPapers)
JEL-codes: G5 I3 O1 R5 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.56:year:2022:issue2:pp:107-117

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