The incident occurred in Dharmaram village of Siddipet district on Wednesday when the farmer V. Balaiah (40) fed three other family members chicken curry laced with pesticide.
While Balaiah and his father V. Galaiah (65) died, his wife and his only son were battling for their lives in hospital.
According to the police, preliminary investigations revealed that the farmer was trying to sell his agricultural land to repay a loan he had taken from moneylenders for his daughter's marriage.
He had received an offer of Rs 12 lakh for the land a few weeks ago but the land prices in the region fell drastically following the central government's move to demonetise Rs 500 and Rs 1,000 notes.
Heartbroken over a 50 per cent fall in his land value and fearing that he may never be able to repay the loan, the farmer ended the life in what appears to be a suicide pact.
Local legislator S. Ramalinga Reddy of the Telangana Rashtra Samithi (TRS) said the central government should own responsibility for the suicide of the farmers.
The demonetisation move has so far claimed four lives in Telangana.
While an elderly person died of cardiac arrest while standing in a queue to deposit spiked notes at a bank in Hyderabad, an auto rickshaw driver in Nizamabad district immolated himself after the financier refused to accept the scrapped currency notes towards repayment of his vehicle loan.