The study was conducted in this leading cotton growing district of Punjab after interacting with sarpanchas and 15 to 50 cotton farmers in each of the seven villages. Indebtedness was reportedly prevalent in all the villages. Only 10-15 per cent of farmers were free from indebtedness and such farmers had other sources of income like service transport.

The indebtedness is said to be in the range of a minimum of Rs 20,000 to a maximum of Rs 5 lakh. Approximately, 80 per cent of the loans were taken from private commission agents and only 20 per cent of the loans were taken from banks or such financial institutions. The CRRID study reportedly indicated that three years ago, only 20 to 25 per centfarmers were indebted and after harvest, most of the farmers were in a position to clear the debts and later on obtain fresh loans for tending the following crops.

The indebtedness has apparently risen steeply, mainly because of the sharp decline in cotton yields in recent years. The average yield of cotton in Punjab which was 593 kg lint per hectare in 1991-92, came down to just about 175 kg in 1997-98 and the average yield in 1998-99 is also expected to be very low at around 170 kg.

The farmers covered by the study are reported to have informed the researchers of CRRID that certified seeds of the recommended varieties were not available in adequate quantities from the State Agriculture Department and Seeds Corporation. Further, farmers have to purchase fertilisers and pesticides from the open market and often they are spurious, the researchers appear to have been told.

(Excerpted from east India Cotton Association weekly bulletin)