An average agricultural household earned a total monthly income of Rs 10,218 during the period 2018-19 (July-June), including net receipts from agricultural production (Rs 3,798) and animal husbandry. (Rs 1,582) together contributed just 53%. . The most important source of income was actually salary / wages, at Rs 4,063. The average farmer, in other words, was more of a wage laborer than a seller of the produce of his land. Of the 93.09 million farming households in the country, more than 70 percent owned less than one hectare of land. It should come as no surprise then that wages generate up to 60 percent of their income. But the share of agriculture – crop production plus livestock – in total income was higher (around 62 percent) for households with 1-2 hectares of land, still rising to 73, 82 and 91 percent for those with 2-4, 4 -10 and more than 10 hectares, respectively.
Simply put, if we consider as farmers only those who derive at least 60 percent of their overall income from growing and raising animals, India would not even have 30 million such households, according to the report on the assessment of the situation of agricultural households from the National Statistics Office. . The 30 million are those who also own a hectare or more of land, which is clearly the minimum exploitation required for agriculture itself to generate a significant portion of a family’s income. This also means that the “agricultural policy” must primarily target these 30 million households. Farm incomes can realistically only be doubled or tripled for those who truly depend on agriculture and have enough land to productively deploy labor and capital resources. They must be able to do so, with better access to markets, water, electricity, credit and other productivity-enhancing inputs. The overall objective should be to reduce their production costs by increasing yields, while simultaneously ensuring greater efficiency in the use of inputs and a minimum environmental footprint.
The question that naturally arises is where does that leave the remaining 60-65 million households – those with less than one hectare of land and “agricultural” only in name? The answer is simple: their future lies outside the farms. The exterior does not have to be in large industrial centers or large cities. It can even include aggregation, grading, packaging, transporting, processing, warehousing and retailing of products. These activities, together with the provision of inputs and services to farms, can generate many more jobs than in the fields themselves. The government should stop obsessing over ‘marginal farmers’. The land limited with them can, if necessary, be better used for dairy, poultry, pigsty, etc. rather than in regular farming. It is better to leave agriculture to those who know how to do it well. Better less, but better.
This editorial first appeared in the print edition on September 21, 2021 under the title “The Future of Farmers”.