agriculture review

Why Farmers Fail To Repay Agriculture Loans 

by aditya abhishek

Shocking Truth!

Every year around 10% of farmers commit suicide due to debt caused by farm loans. Therefore, it is a severe matter of concern. 

Capital Requirement

Just as capital is required to start and run any business, farmers require capital for setting up and managing a farm. 

Interest Rates

However, it is shocking that farmers cannot repay loans even when interest rates are not so high. It generally varies from 7 to 20%.

High Risk 

Every business is prone to various market risks, but there are additional external risks in an agricultural enterprise that can not be controlled by humans easily. 

Natural Factors

Even if farmers plan and execute farm activities perfectly, natural factors such as flood, hailstrom, draught, scarce rainfall, etc., can cause havoc. 


Generally, literacy rates in rural areas are lower than in urban areas. Due to this, farmers face the problem of not understanding new farming methods & schemes. 


To reduce post-harvest storage losses, farmers often face a lack of good grain storage house access. Due to this, harvested grains get damaged if not sold soon. 


Farmers often get a low price for their produce due to poor marketing strategies. They need to identify the perfect market to get the highest profit. 

Improper Practice

In many regions, you will notice farmers cultivating the same plant species repeatedly and following improper fertilizer, irrigation, etc.

Combined Effect

Due to these factors either crop get destroyed completely or yield gets reduced due to which farmers do not gain much profit to repay farm loans overtime. 

Thanks For Reading!

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