An economy can be broadly divided into three sectors namely: the primary, secondary and tertiary sectors. Agriculture is the most important constituent of the primary sector including forestry, animal husbandry, mining and fishing. The secondary sector contains all types of industries and tertiary sectors represents the services sector includes banking, insurance, trade, and other service. The Primary sector is the backbone of the economy and economic development of the most of the nations of the world. If we look at the history of the economic development of the most of the present developed nations or those, which have embarked on the development path, it is the development of the agriculture that has laid the foundation of the development of the other sectors of their economies. 

The Indian agriculture has, from the sixties, made rapid Strides. It has brought the annual food grains production from 51 million of the early fifties to 206 million tones at turn of the century.  The Agriculture sector contribute 25% to the total Gross Domestic Product( GDP) of the India. In Punjab, the contribution of this sector accounts for 40% in the GDP.  Of late the pattern of the growth of agriculture has, however, brought in its wake, uneven development, across   regions and crops as also across different sections of the farming communities  and is characterized by low levels of the productivity and degradation of the natural resources in some areas. capital inadequacy, lack of the infrastructural  support, weather vagaries  and demand side constraints have continued to affect the economic   viability of the agriculture sector in India and particularly the agricultural oriented states like Punjab. 

The growth of agriculture has also tended to slacken during the last five years. At nation level the agricultural growth declined to 3.1% in 2002-03  from 5.7% in 2001-02. This decline in primary sector also hindered the overall economic growth of the country. The total growth rate

scaled down to 4.4% in 2002-2003 from 5.6% in 2001-2002 (source: Finance ministry report- 03 ). The Share of the agricultural export in the India `s export  is also declined to 0nly 15.1% in 2000 as compared to 30.7% in 1980 and 19.9% in 1996 respectively ( Source: Economic survey of India 2001). In Punjab the growth rate of agricultural sector is even less than 1%, it was only 3.47% in 2001-2002 as compared to 3.44% in 2000-01.  

As per the experts the, this downfall is because of the low investment in this sector. The agriculture sector is trapped in a vicious cycle of poverty.  This cycle`s  chain includes the low production, low marketable surplus, low income, low saving and low investment. further, due to this cycle more and more farmers get entangled in web of debt trap. Usually  we find the news  regarding the suicide by the  farmers due to debt ness especially in the cotton belt 

districts of  Punjab State like Mansa , Faridkot, Mukutsar, and Bathinda. The suicides by the many farmers in the Karnataka in  the year 2000 was also because of the ever increasing debt . Apart  from weather vagaries, more often than not arhtiyas( commission agents), unregistered moneylenders and banks are blamed for their condition. As per a study by Dr. H.S.shergill, an economist, PAU, the present debt on farmers is around Rs 9,000, against Rs 5700 crore in 1995-96 in the state. Of this, the share of commission agent  ( arhtiyas) is close to 5500 crore. 

The adequate and timely credit is required to break this vicious cycle of poverty as per the farm experts. In Punjab the agricultural credit is mainly provided by co-operative banks, commercial banks, regional rural banks, land development banks, money lenders and commission agents. The money lenders and commission agents charges very high rate of interest ranges from 24%- 36% per annum. The farmers especially small and marginal, mostly depends on these for their agriculture and social credit requirements. The farmers with large scale holding mostly enjoys the institutional credit facilities provided by various banks because of their approach and  guaranty of repayments. 

The government is putting a lot of efforts to provide institutional credit to agriculture sector through NABARD( Nation Bank for Agriculture and Rural Development) and other banks. Till march 2003, Rs : 75000 crore is provided  to agriculture sector for crop and term loan as compared to 64000 crore in 2002. The agencies wise contribution include 52% by commercial banks like SBI, 41% by cooperative banks  and 7% by regional rural banks and land development banks ( source: The economic times ) . The commercial banks like SBI are also providing the schemes  like ' kisan credit card' for short term loan   and ' kisan gold card ' for long term loans. As per NABARD the credit requirement of Punjab for 2002-03 for short term and long term loans is  Rs: 5.245 crore and Rs: 1.347 crore.  As compared to money lenders and commission agents co-op. banks charges 13.5% rate of interest( ROI) on crop loan, and RRB & Commercial banks charges 10-11% per annum in Punjab. For long term, loans are available at the rate of 12.5% from co-op bank as compare to 10.75% from commercial banks. As per NABARD officials, ROI charge by co-op banks is still higher because NABARD give cheap loans at 6-7% ROI to co-op banks for advancement to the farmer.  

  Thus the benefit of huge some of money available in the co-op. banks at the cheap ROI is negated by high cost of management which is unwittingly borne by farmer. This situation has telling impact on the off-take of credit from co-op banks, which are main source of institution credit in Punjab. The most important task right now  at the hand is to check the exploitation of small and marginal farmers by the money lenders and commission agents  to revive  up the agriculture sector  the state . A study  conducted by the Association for Domestic Rights(AFOR) and movement  against repression ( MASR) had recommended to the Punjab state government to minimize the role of commission agents and money lenders by providing loans at lower ROI through Govt agencies. It recommended that  higher limit of ROI being charge by money lenders should be fixed and the Government should made it mandatory  for the arthiyas to issue pass book (on the pattern of banks) to farmers and  register all transactions. it was also suggested that the debt be written off of made interest free in cases where the debt becomes twice that of the farmers annual income. The amount should be recovered in easy installments.  A debt tribunal should also be constituted to settle the arthiya- farmer disputes. The state Govt. is yet to implements the recommendation of the report.