Category Archive Blog

Farmers Incomes: NABARD All India Rural Financial Inclusion Survey (NAFIS) 2016-17 estimates that an average Indian farming household earned `8,931/month (`1,07, 172/year) in the agriculture year 2015-16. This is up from `2,115 earned in 2002-03 as per NSSO’s SAS, implying a compounded annual growth rate (CAGR) of about 12% in nominal terms and 3.7% in real terms (2015-16 base). To achieve the Doubling the Farmers Income (DFI) by 2022-23 as announced by the central government in 2016, farmers’ real incomes need to grow at 10.4% per annum, i.e., 2.8 times the growth rate achieved historically (3.7%) and it has not achieved this. Instead it went down to less than 3.0% by 2017-18 and the achievement was far lower than the targets. With less than two years left its high time we revisited the strategies.
Agri sector contribution to GDP , is moved from 56.5% in 1950-51 to 15.87% in 2018.. Yet 69.43 % (19.5% agriculture workers and 49.93% cultivators) of population was dependent then and 54.6% (29.96% agriculture workers and 24.64% cultivators); but in absolute numbers it still means (144.3 million agriculture workers and 118.7 million cultivators). Tenant farming exists with wide variations across States. It was 20.6 per cent of the operating area according to 8th round of NSSO Report in 1953-54. In 2002-03, it fell sharply to just 6.6 per cent of the operating area. Policymakers focused on abolition of feudal/semi-feudal agrarian structure with tenancy reforms aimed at conferring ownership right to tenants.
But post liberalisation, during 2003-13, tenancy increased to 10.4 per cent according to 70th round of NSSO Report. Andhra Pradesh (35.7 per cent), Bihar (22.7 per cent), Haryana (14.8 per cent), Odisha (16.9 per cent), Tamil Nadu (13.5 per cent) and West Bengal (14.7 per cent) lead the tenancy league, far above the all-India average of 10.4 per cent.
As the Indian economy becomes mature and inclusive, tenancy is likely to further increase. Land being scarce, there is severe demand for it. Urbanisation has made inroads into the rural landscape. Tenancy and sharecropping have become livelihood options in agriculture, to supplement incomes arising out of lesser availability of land.
Small and marginal farmers with less than two hectares of land account for 86.2% of all farmers in India, but own just 47.3% of the crop area, according to the 10th agriculture census 2015-16. In comparison, semi-medium and medium land holding farmers owning between 2-10 hectares of land account for 13.2% of all farmers, but own 43.6% of crop area, the survey showed. During this period the proportion of small and marginal farmers grew from 84.9% to 86.2%, while the total number of operational holdings grew from 138 million to 146 million.
The total area under farming, however, fell from 159.6 million hectares in 2010-11 to 157.14 million hectares in 2015-16.
About 56 % of the total cultivated area (61% of farmers) in India falls under rainfed agriculture. The importance of the rainfed agriculture can be gauged from
the fact that it contributes to 40 % of the country’s food production; accounts for much of the national area under coarse cereals (85%), pulses (83%), oilseeds (70%) and cotton (65%); and holds 60 % of the total livestock populations. But investment on rainfed area is very limited and almost 20 times lower than irrigated areas.
As a result of the changing climate, monsoon rainfall in 2018 was the sixth-lowest since 1901, according to the India Meteorological Department (IMD). It was also the sixth-warmest year since 1901, when recording started. Further, monsoons in 2019 have also been recorded as the slowest progressing in at least 12 years, IMD data showed. Till July 7, 2019, IMD recorded a rainfall deficit of 21 per cent, while June recorded the second-lowest rainfall in the past seven years after the 42 per cent deficit in 2014. Moreover, 20 states in the country witnessed deficient rainfall, while three were in ‘large deficient’ category from June 1 to July 7 this year.
Currently, irrigation consumes 84% of the water (industry 12% and households 4%) Water use in irrigation in India is 2 to 4 times that in USA and China per unit of major crops. Share of canal irrigation in net irrigated area declined from 39.8 % to 23.6 % and Groundwater sources increased from 28.7 % to a whopping 62.4 % between 1950-51 and 2012-13.
The rate of unemployment among men in rural areas between the ages of 15 and 29 years jumped to 17.4% in 2017-’18 compared to 5% in 2011-’12. The unemployment rate among women in rural areas stood at 13.6% in 2017-’18 compared to 4.8% in 2011-’12, according to the latest NSSO report. Unemployment among youth in urban areas was higher than in rural areas – 18.7% for men and 27.2% for women in 2017-’18. So creating a positive migration of labour to urban areas and to other sectors also seems to be impossible.
Productivity levels of most crops in most of India are much lower than global standards: For example, India is the Second large producer of cotton with 27 million bales (21% of world production) with largest area under cotton cultivation with 12.3 million hectares and constituting about 25% of the world area while yield is estimated at 480 kg/hectare making it rank 36th in terms of per ha productivity. While India is the only country using hybrids in cotton in more than 99% of its cropped area all other countries largely follow high density and Ultra Narrow Planting techniques with straight line varieties. In India rice is grown in 43.86 million ha, the production level is 104.80 million tones and the productivity is about 2390 kg/ha.  The highest productivity is 6710 kg per ha of China followed by Vietnam (5573 kg /ha), Indonesia (5152 kg/ha), Bangladesh (4375 kg/ha). India’s wheat average yield in 2013 of 3075 kg/ha is lower than the world average of 3257 kg/ha. India’s best state, Punjab, has paddy yield close to 6000 kg/ha whereas China’s yield is 6709 kg/ha. These variations comes from various reasons including climate, soil type, technology adopted, support systems available and market prices. While largely these differences are attributed only to input use and high input agriculture models are pushed, data and reports show that local agroecological conditions play more important role. For example, yields from temperate areas are higher than tropical areas in general in all crops. Therefore agroecological approaches which takes into account local context is important way forward.
This suggests there is room to improve: This improvement, while keeping it sustainable and not harming soil, will come through more capital investment in soil moisture conservation, irrigation (drip, sprinkler, other water efficiency), husbanding biomass effectively and partnership between research and progressive farmers.
Allied sectors line and associated ecosystems will also need attention, like catchment area of tanks and rivers, watersheds, bio diversity, and move towards agro ecology.
Precision agriculture models and farming in controlled conditions like polyhouses, hydroponics, aquaponics etc give new opportunities much more research is needed to make them economically and ecologically sustainable. currently they are highly energy and chemical intensive.
Then talk about how even when people are migrating to cities, large numbers go back to village for the kharif crop; the sense of community, of belonging there as well as ability to grow the cereal crops for consumption continues to be important social and livelihood strategy.
Around 67 per cent of total operational land holdings in India are owned by marginal farmers, with an average size of 0.39 hectare1 (GoI a). A farm size of less than a hectare, irrespective of its efficiency, may hold only a limited livelihood potential. Yet, majority of land holdings in India are less than a hectare. The average farm size of land holding for a marginal farmer has remained unchanged between 2000-01 and 2010-11 at around 0.4 hectare. The incomes of the farmers comes from four different sources. At the national level the average monthly income of farmers is Rs. 6426 which comes from cultivation (47.9%), livestock (32.2%), wages (11.9%) and other petty businesses (8%) while for small and marginal farmers (86.2%) who cultivate less than 2 ha of land income from livestock is much higher compared to cultivation. Therefore diversifying assets and income sources becomes more important for small and marginal farmers to achieve decent income.
While government supports farming through various schemes, the last mile delivery of support services is always a failure. This is due to wrong design of the schemes and subsidies e.g, entire support for managing soils and fertility are through chemical fertilisers (Rs. 79,000 Cr in 2019-20) it is available only to those who uses them. farmers practicing organic and natural farming cannot access such support. similarly big ticket subsidies like polyhouses (approximately Rs. 35 lakhs per unit) are on increase, small ticket subsidies are on decline. The second problem is due to lack of identity for cultivators. Today only means of identifying farmers is through land title and all supports for farming use this as the identification mechanism. in a situation where tenancy is increasing the tenant farmers are kept out of the ambit of any of these support systems. for e.g. interest subvention on crop loans is goes to land owners only. tenant farmers have to take loans from private money lender at interest rates as high as 10% per month.
As the income of the farmers were not going up,the Centre announced what they call as Pradhan Mantri Kisan Samman on the lines of Direct Income Support measure like Rytubandu in Telengana and KALIA in Odisha. Similarschemes were announced by other states like Krishi Krishak Bandhu by West Bengal and YSR Rytu Barosa (earlier Annadata Sukhibava) by government of Andhra Pradesh. Unfortunately, all these schemes have picked random numbers in terms of support provided under Direct Income Support and has not made any effort to institutionalise the process, linking it to the inflation like the salaries of the employees. Another major problem is all these support measures are linked to land ownership. This excludes large numbers of tenant farmers. Measures like this along with interest subvention on farm credit, disaster compensations, income tax exemptions going for land owners, more incentives are created for landowning and less and less for cultivation. This is creating a disastrous situation in states where tenant farmers numbers are in high.
The inputs costs are increasing and net incomes of the farmers are going down significantly. for example, average gross income from cotton cultivation was Rs. 73200 /ha (2010-15) while net income was Rs. 9259 /ha. Net income showed a negative trend during 2010-15 while the gross income remained stagnant. Net income decreased from Rs. 24682 /ha (2010-11) to Rs. 15604 /ha (2013-14) and it was negative (Rs. 6318 /ha) during 2014-15. Average cost of cultivation increased from Rs. 31817/ha (2005-10) to Rs. 63941/ha (2010-15). This is mainly due to the increase in the operational costs (72%). Same is the case with most of the crops. While Minimum Support Prices are announced for more than 24 crops only 2 crops (paddy and wheat) have regular procurement and more than 70% of the produce is procured only from 3-5 states.