1. Farmers need money for inputs like seeds, fertilizers, pesticides and repair of tools, etc.
2. Small farmers cannot mobilize that money.
3. They borrow from medium and large farmers or moneylenders.
4. They charge higher rate of interest, usually 36% per annum.
5. Whereas banks provide crop loan to farmers.
6. But banks charge only 8% per annum.
7. Thus there is great variation in the rate of interest.
