Dowry Demands Trap Indian Farmers in Cycle of Debt

‍ ⁢Updated June 10, ⁢2025

In Meerut, India, mohammad Mohsin’s family ⁤exemplifies the unintended consequences of the Kisan Credit Card ‍(KCC) scheme. Intended to provide farmers with accessible credit for agricultural expenses, the KCC is increasingly used to meet social obligations like dowries, trapping families in ⁢cycles of debt.

Mohsin borrowed approximately $1,440 in 2023,⁤ not ⁢for sugarcane or fertilizer, but for his sister Aman’s dowry. The groom’s family demanded a car and a⁣ substantial amount⁣ of ⁤cash.⁢ Mohsin made a down payment on a car, but the marriage fell‍ through due to further⁢ dowry demands, leaving him ⁢with⁢ debt and no resources for farming.

The KCC⁢ functions like⁢ a credit card,allowing cash withdrawals. ⁢When farmers cannot repay loans, the ⁣interest rate increases, further exacerbating their financial strain.⁣ Mohsin now ‍struggles to repay the ⁢loan, risking a damaged credit rating.

Aman,meanwhile,has completed her Islamic theology studies ⁢and her‍ family is ⁢again ⁢searching for a⁢ groom.Her mother, Amina Begum,⁣ said dowry is essential for marriage in ⁤their community. ⁣This perpetuates the cycle, as‍ Mohsin may need to rely on the KCC again.

Farmers often turn to local middlemen‍ to⁣ renew KCC loans, incurring exorbitant interest rates,⁤ further ‍deepening their ‍indebtedness.⁤ Vijoo Krishnan, a farmers’ union leader, noted the KCC is also used for healthcare and education, ⁢creating a “growth debt trap.”

Mohammad‍ Mehraj, a former village head, said farming barely sustains families, making them vulnerable⁢ to financial pressures from ⁣medical⁢ emergencies and weddings. The shame of defaulting on loans adds to the burden.

“the system doesn’t break down⁣ your door,it breaks your ⁤dignity,” Mohsin ‍said.

Thomas Franco, a former bank officers’ federation leader, said the KCC scheme, while expanding credit access, has⁣ also created a debt trap. Loans intended ⁢for productivity are diverted to meet social obligations.

Official data indicates the KCC scheme disbursed over $120 billion to⁢ farmers by 2024, a important⁢ increase from ‍$51 billion in 2014. however, Franco said these numbers mask the reality of banks renewing loans without actual repayment, exaggerating the scheme’s success.

Many farmers ‍are taking their ‍own lives due to overwhelming debt. ‍maharashtra reported the highest number of farmer suicides in⁢ 2023. Critics argue ⁤that structural reforms are needed to provide better public welfare systems and make farming profitable.

Jayati Ghosh, a development economist, said the ‍agricultural credit ⁣system is out of sync with ‍farming realities.She said loans need to be subsidized, decentralized, and designed around real conditions in ‍the field.

The KCC scheme has also been plagued by ‍loan scams. In Haryana, farmers used forged documents to secure loans. In ⁢Uttarakhand, a dealer created fake bills and ghost loans. Despite these issues, a loan disbursal agent said the KCC scheme suffers from weak oversight.

“This is not about‍ debt. It’s about ⁣dignity,” said Dharmendra Malik, a spokesperson for the Indian Farmers’ Union.

Mohsin has not been able to renew his family’s KCC loan for over two ⁤years. Each harvest brings more bills and losses. Looking at his fields, he questions the future of‍ farming.

What’s next

Without significant reforms to address the root causes of rural distress, Indian farmers will likely continue to struggle with debt and the ⁤pressures of social ⁢obligations, perpetuating a cycle of despair.