How do farmers get into debt trap?

cbse
economics
money-and-credit
cbse-class-10
cbse-class-10-social

#1

How do farmers get into debt trap?

Answer:

  • Farmers usually take crop loans at the beginning of the season and repay the loan after harvest.
  • Sometimes, the failure of the crop makes loan repayment impossible.
  • So, the farmers have to sell a part of their land to repay the loan. Credit in such a condition pushes the borrowers into a situation from which recovery is painful and they get into the debt trap.