Farmer Suicides, Debt Cycle And Broken Families Of Punjab.

The opposition parties in Punjab Assembly session have raised important points and data about the attachment of lands of farmers by banks. Even though the data is not wide and from across the Punjab it still is very alarming.


The disillusionment with Green Revolution started in around late 70s when the benefits of this ‘marriage of science and politics’ started showing its ill effects like depletion of water table, excess presence of pesticides in the soil, loss of nutrients from soil, and the most important of all ‘the need to mechanise’ agriculture at the pace which resulted in engulfing small and medium scale farmer in vicious cycle of debts. In this comprehensive research piece that I complied with the help of experts at PAU (Punjab Agriculture University), I take a look at cause, consequences, the broken families and how the three laws do nothing to address the situation.

There is no doubt that Punjab’s farming is very capital intensive with the highest tractor density (68 per 1000ha net down area) with every third farming household owning a tractor. And these tractors are under-utilised at much larger scale in small farms (77%) as against (50%) and (30%) in medium and large farms. Even electric motors and diesel pumps, which number more than 11lacs in the state are grossly under-utilised in small farms (16% and 84% respectively) as against the overuse of electric motors to the extent of 11% on both medium and large farms and underutilisation of diesel pumps to the extent of 67% and 38% in small and large farms respectively. The machinery cost that accounted for 21% of the operating cost in 1992 has now gone to 32% in 2020-2021. This indicates over capitalisation of small farms in the state which has led to higher cost of cultivation due to fixed cost component.

Many activities such as motor burnouts, tubewell deepening, electric connection activation cost a lot of money. For example motor burnout costs in Punjab for marginal farmers is 10% of their gross farm income and it is 7% in Haryana. Most analysts don’t take these factors into account because they haven’t really stepped into a field and as SFJ the policy makers are more or less unaware about these costs of agriculture. This has led to non availability of institutional credit for these purposes which throws the farmers into the clutches of any other means of credit. In this case the commission agent or the arthiya becomes the necessary evil. The new laws no where take these factors into account to eliminate middle men. None of the clauses in the laws talks about institutional credit for farmers and analysis of cost factors.

There is no doubt that the seasonal crop Loan limits for different crops are inadequate to meet the higher and increasing cost of production( meeting only about 60% credit needs in top most states like Punjab, MP, Haryana). This gap of 40% is the cause that pushes farmers into whirlpool of the debt cycle. Also seasonal payments in the institutional sources of loans before availing fresh loans for new seasons makes it hard for the farmer to save or retain any money even if the crop is sold at Minimum Support Price or higher than that. (Only 2% cases of higher sale than MSP in 2020)

The compromise for small or marginal land holders in Punjab therefore is to grow the crops that have assured MSP procurement (wheat and Paddy) and do some dairying to support their livelihood. Small farmers are therefore leasing out lands to large farmers or the non cultivating section of people to meet their ends. This phenomena in Punjab is ‘reverse tenancy’. Reverse tenancy however comes at a cost for the small farmer. This not only decreases the landholding for small farmer but also puts him under additional pressure to end the lease when his economic conditions improve. This cycle cannot be seen as dangerous until we couple it with need to mechanise for the part that is not leased out or being cultivated by farmer himself. In most cases the small farmer leases out to either repay the loan instalments or to support family urgencies like marriage or illness. Leasing is preferred over non institutional loans. The new laws do not address this problem of small farmers at all.

The matters are made worse with crop failure (19% of the suicides) for which generally there is no relief at all (not even in the ‘reforms’), high cost of modern inputs (30%). These two factors alone contribute to almost 50% of the suicides in Punjab. Crop failure has resulted in making entire region of cotton belt as widow zone because cotton crop required high priced market inputs.

Now there is something called as non farming credits. It has been observed by all economists that marriages and illnesses are met with high interest private debt which often push families into poverty. There are serious questions raised by everyone in this regard. Farmer unions have time and again announced that marriages be done in simplistic manner but most farm unions and state policy makers often fail to highlight that it is due to non availability of consumption credit by institutional mechanisms that leads farmers into the hand of private money lenders. A classic example and very common one is that of bank loan funded new tractors being disposed off in second hand market immediately after purchase to arrange cash for functions like marriage, paying off old debts, illnesses etc. The recent suicide of father and son in Punjab made news. Father son duo availed a loan to buy a tractor which they hoped to sell in second hand market to pay off the instalments of their already existing loan. The failure to find a buyer in current scenario and constant harassment by the banks & attachment of small plot of 2ha resulted in both of them committing suicide leaving behind two widows and family of 5 to support. The new laws don’t change any of this.

Some economists with no standing of the ground issues have often argued that the cause of suicide be the immediate one & not the indebtedness of the farmer. This is erroneous assumption and also a horrendous one. The debt related suicides are often prompted by family issues, alcoholism, loss of respect in society, visits by the collection teams etc. Another horrendous assumption made is that farmers don’t sell land so indebtedness is not the cause of death, this again is very stupid and misread assumption because most indebted farmers either don’t have control of their land or consider selling land equivalent to death. The recent data on attachment of lands of farmers in Punjab is rather alarming. More than 60,000 farmers in Punjab have got notices due to non payment of their first instalment. This number is higher than 60,000 but the reported one as per private survey of opposition parties in Punjab reads it as 60,000. More than 400 farmers have received notices of land attachments by Punjab National Bank and State Bank of India. This data again is of only two banks and will be higher if all banks and non institutional credit agencies are taken into account. More than 83,000 farmers have been fined for failing to pay their seasonal instalment. More than 1lac 20,000 farmers have been red listed or barred from availing fresh loans on machinery.

The broken families of Punjab and role of women.

The extent of indebtedness and farmers taking recourse to suicide leave thousands of fatherless families with the entire burden on the women folk to raise children and support the families. In my discussions and research I have found the following cases that are worth noticing on how women support the families after men are gone.

In Ferozpur there was a suicide in Nov 2008, the family faced constant harassment by bank agents and private money lenders. Constant harassment, education of children, etc used to worry Baljit singh. Baljit singh had his children removed from private school to government school. The prospect of marrying three daughters kept him stressed. Baljit Singh consumed pesticide at his farm on 8 Nov 2008.

Balwinder Kaur and Kuljit Kaur two neighbors in Mansa sold their lands 2ha and 1.5ha respectively in 2010 to pay the remaining loan amount after their husbands committed suicide on the same day by jumping into canal. The women earn their livelihood and support their children by selling milk and doing tailoring work at boutique. Many important factors contribute to further worsening of situation when men leave because women do not undertake the jobs like being a maid in the same village. Kuljit kaur for example goes to a different village to work as maid for rich farmer.

Way out

There is need for pushing better irrigation systems as recommended by Swaminathan report. The micro irrigation programs need to be subsidised because the current system is unsustainable and will only act as black hole for farmers money pushing them into debt. And no the new laws don’t talk about it.

There is institutional decay when it comes to agri finance leading to vacuum which pushes the farmers into debt cycle. The need of the hour is to reform the agri finance sector by more cooperatives and widening the scope of consumption and non consumption loans.

There is dire need to unmark the farmers from the black lists that institutionalised credit centres have maintained. These black lists are clear methods of pushing farmers into the clutches of private lender and arthiyas.

Mechanisation of agriculture means nothing if there is no impetus on diversification of crops. The diversification as argued by many economists is not the responsibility of the farmer. No program by central government has made its journey half way when it comes to diversification. There is need for heavy subsidies and financing for diversification to make farmer feel safe. The new laws don’t do it in any way. The new laws take away the safety of MSP from farmers pushing them to fight the diversification fight alone (without govt accountability) and worse with the preying eyes of corporations ready to take away the lands of dying farmers.


Suicide is not an individual act, it is clear indication of failure of state policies and economic mechanisms that are dictated by global policies without on ground knowledge. Farmers suicides in Punjab are just tip of an iceberg indicating the plight of millions of cultivators across the nation. The current reality is a grave indicator of the changes that need to be brought in the state and financial institutions. The peasant movement of 2020-2021 is a step forward in highlighting the condition of peasantry in the country.

One thought on “Farmer Suicides, Debt Cycle And Broken Families Of Punjab.

  1. Green Revolution did good to Punjab in many ways. Especially the land consolidation which you will be surprised is no where in India. Rice was brought to Punjab, irrigation systems were improved. But, not a single government or agricultural scientists ever thought about anything beyond Green Revolution. Green Revolution was relevant when it was introduced but look at the number of decades past since. Has any Government ever thought about agriculture? Agriculture is a state subject and it should remain so.

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