Question

Which of the following are the reasons why farmers fall into debt trap.

• A. Small farmers do not get loans from banks
• B. Farmers are forced to sell their produce at lower than market price.
• C. Dependence on money lenders.
• D. They get low interest loans from banks

Answer 1

Answer: (A), (B), (C)

The correct options are
A Small farmers do not get loans from banks
B Farmers are forced to sell their produce at lower than market price.
C Dependence on money lenders.

The small farmers often borrow money from money lenders. In return they are often forced to sell their produce to the money lenders at a price which is less than market price. Moreover small farmers find it difficult to avail bank loans. These reasons cause the farmers to fall into debt trap.