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Single Answer MCQ
Q-00045458

What is an example of a situation that could lead to a debt trap for farmers?

1

Good crop yields and stable prices

2

Crop failure and high interest payments

3

Reduced input costs and government subsidies

4

Stable market conditions and diversified crops

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Sandeep Chaturvedi

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Answer and Solution

Answer

B. Crop failure and high interest payments

Solution:

A debt trap can occur when there is crop failure and high interest payments. This situation makes it difficult for farmers to repay their loans, often forcing them into selling assets.

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