Is it fair to give farmers lower interest rates on loans because they are farmers?
Interest rates on loans affect the farmers directly. Higher the rate of interest more will be the cost of production of the farm operation. Interest rates are witnesses to increase over time and are expected to increase in the next few years in almost all countries. At the same time, agriculture production has also decreased with time. Farmers are not getting sufficient prices for their goods due to which their production is becoming low. With such a situation high-interest rates become hard-hitting for them. Several challenges lie in front of the farmers, out of which one is the high-interest rate on loans. High-interest rates would be harder on the farmers who do not have huge amounts of equity in fixed assets. Also, it will hit the farming operations that are increasing rapidly by using borrowed funds and cash-rent most of their land without involving in any side source of non-farm income such as livestock, animal husbandry, etc.
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