Indebtedness, Credit Sources, and Loan Burden of Farmers: A Study in Bikaner District of Rajasthan, India

Abstract

This empirical study examines the indebtedness patterns and credit utilization behaviour of farmers in Bikaner district, Rajasthan through a multi-stage random sampling of 90 cultivators during 2017-18. Results reveal that 67.8% of rural households are indebted, with institutional sources dominating credit supply at 74.84%, primarily through commercial banks (92.23%), while non-institutional lenders account for 25.16% of total borrowing. The analysis demonstrates significant farm-size disparities in debt burden, with per farmer indebtedness escalating from ₹232.57 thousand for small farmers (<8.5 ha) to ₹475.05 thousand for medium farmers (8.5-15 ha) and ₹727.50 thousand for large farmers (>15 ha). Productive loans constitute 76.47% of total credit, with tubewell construction commanding the largest share (38.26%) reflecting irrigation imperatives in this arid region, followed by land development (27.69%) and farm machinery (17.37%). Non-productive borrowing (23.53%) is concentrated in healthcare (33.65%), house construction (31.61%), and marriage expenses (24.62%), with smaller farmers disproportionately dependent on such credit for survival needs. The findings underscore the vulnerability of marginal farmers to debt traps due to higher reliance on expensive informal credit and consumption-oriented borrowing, highlighting urgent policy needs for enhanced institutional credit access, financial literacy, and productive investment promotion in Rajasthan's desert agriculture.