What threat does borrowing from a moneylender at high interest create for a farmer livelihood?

Correct answer: Debt trap and pressure on income

A high-interest loan requires the borrower to repay much more than the original amount. If harvest income is low because of poor weather, disease, falling prices, or other costs, the farmer may be unable to repay on time. Interest then continues to grow, and the farmer may borrow again or sell assets to meet payments. This cycle can consume income and weaken the household’s ability to invest in seeds, education, or future production.

Option A is correct because repeated borrowing and rising repayment obligations can create a debt trap and put pressure on farm income. High-interest credit does not improve soil automatically, stop harvesting, or close every market. The question highlights the risk of informal credit when terms are expensive and the borrower has little protection. Careful records, fair credit, and repayment planning can reduce this danger.