Under the ryoti system, the indigo planters forced the ryots to sign an agreement or contract. At times, the village headmen signed the contract on behalf of the ryots. Those who signed the contract got cash in advance at low rates of interest to produce indigo. According to this contract the ryots have to cultivate indigo on at least 25% of their holding area. When they deliver the crop to the planter a new loan was given to ryots and cycle starts again.

Ryots were reluctant to grow indigo because:

(a) The indigo system was intensely oppressive.

(b) Peasants who were initially tempted by the loans soon realized how harsh the system was. The price they got for the indigo they produced was very low and cycle of loans never ended.

(c) The planters usually insisted that indigo be cultivated on the best soils in which peasants preferred to cultivate rice.

(d) Indigo had deep roots and it exhausted the soil rapidly. After an indigo harvest the land could not be sown with rice.