Why do Farmers take Loans?

Supply chain, unpredictable nature of crop yields, price fluctuations are the least of the problems, the fundamental problem are totally different and most of us don't realize this. Modern education has snatched away sustenance from our Farmers, in the olden days Farmers always remained as producers which means not only they produced food grains but also they never spent a single dime on the following:

• Number 1 Reason - Marriage (marriages were conducted in front of a temple or their houses) - Today conducting a Marriage has become a prestige factor, on average even a poor farmer spends 15 - 25 Lacs. If you take 2 marriages per family they would spend about 30-50 Lacs from both the marriages, most Farmers sell their lands or take loans to fulfill this false prestige.
• Number 2 Reason - Education - during my grandparents days most of them went towards farming and like my Dad types they studied in free Government Schools - Today even the poorest of the Farmer wants to send their kids to Private Schools just because the Government Schools in Karnataka teaches in Kannada medium and the parents feel that their kids won't be able to compete with the English medium kids. Each year the Farmer spends about Rs 50,000 per child and 99% of them have 2 kids and they would need about Rs 1,00,000. So they end up paying an average of 25 Lacs until the Kid completes the college degree, for 2 kids 50 Lacs.
• Number 3 Reason - Health - In the olden days birth and death used to happen in homes, they ate organic fresh foods grown by them and the immune system was awesome. 1 in 1000 had to see a village desi doctor and that too there was no money (in return for the service offered, Farmer used to give some Paddy or Ragi). But today due to the chemical usage the quality of food has gone to dogs and on top of it, the modern medical world has made them so nervous that even for a simple cough they run to a Doctor and they end up paying Doctor fee + Lab Tests / Scanning Fee (every doctor recommends Lab Tests & Scanning) + Medicine. We surveyed on this subject in a village called Keelara and we found out that on average they spend about Rs 75,000 - Rs 1,50,000 per annum on health-related expenses.
• Number 4 Reason - Farmers have become Consumers - Today's Farmer buys all the household items from the market > Soaps, Hair Oil, Shampoo, Beauty Creams, Tooth Paste, Washing Utensils, Meat, Snack, Greens-Vegetables-Fruits, Pulses, Grains, Cooking Gas, etc. All these things were produced at homes for free for ex:

> Soaps = Soapnut powder

> Hair Oil = Homemade Castor Oil or Coconut Oil (Castor Seeds/Coconuts were grown at their farms)

> Tooth Paste = Neem Sticks or Activated Charcoal or Salt

> Washing Utensils = Lemon from their backyard or activated charcoal from their wood fire cooking area or tamarind from their farm

> Meat = Farmers used to rear goats, sheep & chicken at their homes

> Beauty Creams = Turmeric paste or butter from the milk

> Greens-Vegetables-Fruits = Grown in their backyard

> Pulses & Grains = They used to grow whatever they consumed in their farmlands (multi-cropping), today's Farmer has become a mono-cropping commercial Farmer and in Mandya, he mostly grows one type of crops like Sugarcane or Paddy.

> Cooking Gas = They used to cook their meals using firewood which was available from their farmlands, today they shell about Rs 700 per month for the so-called Free Gas. Today in New York firewood-cooked pizza costs more than a gas-cooked pizza which our farmers used to practice daily, today we have converted this sustainable free practice into an unsustainable practice.

• Number 5 Reason - Farm Inputs - Today's Farmers buy and uses Chemical Fertilizers, Pesticides, Growth Hormones, etc. In the olden days, they used to prepare all farming inputs from their cattle for free.

Most of our Farmers are marginal Farmers which means they hold less than 3 acres of land and on top of it all the Universities are preaching commercial mono-cropping practices like Sugarcane, Paddy, Wheat, Arecanut, Coconut, etc. On average per acre income from these crops is about Rs 80,000 - Rs 1,00,000 per annum and if you take out the farming input and labor expenses they would roughly earn about 25K-35K per annum. 

If I am a Farmer with 2 Acres, with 2 kids - In a year I would be spending about 1 Lac for education, 75K on Health Expenses, 1.2 Lacs for Reason 4, and if I have to save for their marriages I would have to save 1 Lac per year (total expense of 3.95 Lacs per annum) and my income from 2 acres is about Rs 70,000 (best case scenario). Now you can do the math on why our Farmers need credit.

Most of them think that Farmers have become poor because of low yield or they not getting good prices for their products but that's not the reason, the above reasons have made them poor and they will continue to become poor if we don't address this on time.