Abstract
Agrarian distress is a global issue and is directly linked to poverty and hunger in developing countries. In India, agrarian distress has been manifested in the form of farmers’ suicide for the past 20 years. Agrarian distress in the farm household is resulting in deteriorated living standards, challenges in getting a quality education, forced migration, unmanageable health expenses, and poor nutrition level. In this regard, financial analysis is an effective method to identify the severity of the agrarian distress in the farm households (FHH). In this study, a financial analysis of 150 FHHs from Yavatmal district (being India’s most agrarian distressed area) has been conducted for three consecutive years from 2016–17, 2017–18, and 2018–19. After preparing financial statements and computing financial performance measures, FHHs have been categorized into five groups (i) FHHs not earning profit from the farm, (ii) FHHs not able to save money at the end of the year, (iii) FHHs putting their asset in risk, (iv) FHHs not able to repay the loan, and (v) FHHs not able to earn sufficient from farm to fulfill their HH expenditure. It has been observed that 22%, 16%, and 14% of the sampled FHHs, respectively in the year 2016–17, 2017–18, and 2018–19 earned sufficient from their farm to fulfill their domestic expenditure (category v). Thus, it was found that year on year the percentage of farmers able to meet their household expenditure was decreasing which could be of help to policymakers in deciding the remedies to improve the financial status of the distressed FHHs.
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Acknowledgements
The authors would like to thank the partner NGO ‘Deendayal Bahu-Uddeshiya Prasarak Mandal’ for providing a platform to interact with farmers in Yavatmal, India. The authors are thankful for the 150 farm households from Indiragram, Malkhed, and Pathari who participated in the survey activity and gave a glimpse of their beautiful lives.
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Bagade, N., Rao, B., Kedare, S.B., Vekhande, S., Honkalaskar, V. (2023). Farm Household Accounting System for Financial Analysis in Distressed Areas of Rural India. In: Chigullapalli, S., Susha Lekshmi, S.U., Deshpande, A.P. (eds) Rural Technology Development and Delivery. Design Science and Innovation. Springer, Singapore. https://doi.org/10.1007/978-981-19-2312-8_4
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