Non-farm activities need a big push to boost rural incomes, say experts

Doubling farmers’ income by 2022 it now appears will not be a snap, with reduced earnings from crop production amid increased debts, as shown by the latest findings of the National Sample Survey (NSS).

This has highlighted the need for a strong policy response to reverse the trend.

Incomes from crop production have dropped while wages have become the mainstay for rural households, experts say.

This trend was seen in the last NSS of 2013, followed by the Financial Inclusion Survey of 2015-16 (of the National Bank for Agriculture and Rural Development) and now the current one. This calls for stronger and structural measures to overcome the challenges facing the country’s rural sector.

According to an earlier report in this paper, the latest survey showed farming had taken the backseat in rural India at aggregate level.

While the number of farming households increased from 90 million to 93 million in six years, the number of families not engaged in farming rose from 66 million to nearly 80 million in the same period (2013-19).

It showed an average farm household in India had debts of Rs 74,121 in 2018-19 compared to Rs 47,000 in 2012-13.

“As income grew 60 per cent over six years, average debt, too, rose with a similar degree, by 57 per cent,” the report had said.

In real terms, income growth was even lower at 21 per cent between 2012-13 and 2018-19 (six years), the report said.

“Debt is growing for a rural household because expenditure on health and education is rising in rural areas, so is spending on agriculture while incomes are not being commensurate enough,” Mahendra Dev, director of the Indira Gandhi Institute of Development Research (IGIDR), told Business Standard.

Dev said an overhaul of policy was needed to diversify the crop sector through promoting more high-value products that generate higher incomes while changing the mindset that prevailed in the 1960s.

“The survey shows that wages have become the predominant earning source for a rural household. Wages, we all know, aren’t growing in rural areas because economic activities outside farms are limited and falling,” Dev said.

He said in coming years wages would continue to remain a big part of the income of an average rural household because the landholding size is shrinking further, for which the non-farm sector in rural areas needed to grow.

“In the past two-three years we have incomes from sources other than crop cultivation falling sharply while in the crop sector mono-cropping has taken over in a big way, which has to give way to integrated farming systems. Therefore, a farmer having 30 acres in Punjab gets the same institutional support as a small agriculturist owning three acres in Anantapur in Andhra Pradesh. This has to end. Big dairies are gobbling up small backyard livestock, which is limiting additional sources of incomes for the rural household,” said G V Ramanjaneyulu, executive director of the Centre for Sustainable Agriculture (CSA).

He said: “We have increased migration because income-generating opportunities in the rural sector have been diminishing. We need to think of livelihood opportunities in rural areas outside farming, not MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) types of schemes but small collectives, small self-help groups, and small irrigation projects groups.”

P K Joshi, former South Asia director of the International Food Policy Research Institute (IFPRI) and member of the Supreme Court Panel on the three farm Acts, said returns from agriculture were not commensurate in rural incomes as farm sizes are getting small. In the non-farm sector income opportunities are limited or going down.

“In our country, though the size of farm land is dropping, a disproportionate number of people are dependent on land for their livelihood, which needs to change. We need to shift more people out of farming to the non-farm sector, where income opportunities can be tapped through skilling and training,” Joshi said.