Is dependence on farming for livelihoods and incomes rising in India, reversing a decades-old pattern of the agricultural countryside turning into more and more much less tethered to agriculture?
The All India Rural Monetary Inclusion Survey for 2021-22, launched earlier this month, discovered that 57% of rural households within the nation — together with households in semi-urban centres with a inhabitants of lower than 50,000 — have been “agricultural”. This was considerably greater than the 48% reported within the earlier survey of 2016-17.
The survey, commissioned by the Nationwide Financial institution for Agriculture & Rural Growth (NABARD), outlined an “agricultural family” as one which (i) reported a complete worth of produce from farming exceeding Rs 6,500 (be it cultivation of subject and horticulture crops, livestock and poultry rearing, or aquaculture, sericulture and apiculture); and (ii) had not less than one member who was self-employed in such actions throughout the reference yr (July 2021 to June 2022). Within the 2016-17 survey, the edge cut-off worth of produce was Rs 5,000.
Extra krishi in Bharat
The share of rural households recognized as agricultural, primarily based on the above definitions, has gone up for almost all states between 2016-17 and 2021-22. (see Desk)
Additionally, the all-India common month-to-month revenue of agricultural households, at Rs 13,661 in 2021-22, was greater than the Rs 11,438 for non-agricultural rural households. Within the 2016-17 survey, too, agricultural households earned a better common month-to-month revenue (Rs 8,931) in contrast with their non-agricultural rural counterparts (Rs 7,269).
Inside agricultural households, the contribution of cultivation and animal husbandry to complete revenue was over 45% in 2021-22, up from 43.1% in 2016-17. This elevated share of revenue from farming actions was seen for agricultural households throughout most measurement courses of land possessed: from 23.5% to 26.8% for these with lower than 0.01 hectare, from 38.2% to 42.2% for these with 0.41-1 hectare, from 52.5% to 63.9% for these with 1.01-2 hectares, and from 58.2% to 71.4% for these with greater than 2 hectares.
Merely put, the proportion of households in rural India reliant on agriculture as a livelihood supply has registered a pointy enhance between 2016-17 and 2021-22. Even for agricultural households, the revenue from farming has gone up as a share of their total revenue. There’s correspondingly a smaller share of revenue coming from non-farm sources (reminiscent of authorities/personal jobs, self-employment, wage labour, hire, deposits and investments), which applies to all land measurement classes.
The current interval, in different phrases, has witnessed extra, not much less, of krishi (agriculture) in rural India or Bharat. Not solely is there a better share of agricultural households, they’re additionally accruing extra revenue from farms.
Influence of Covid-19?
The reference yr (2021-22) for the newest survey was one which adopted the Covid-induced lockdowns. The influence of the restrictions on financial exercise, imposed within the wake of the pandemic’s first and second waves, might effectively have been mirrored within the survey’s findings. Whereas the curbs have been absolutely lifted from July 2021, the financial scars took time to heal.
Agriculture-related actions have been particularly exempted from the lockdowns. For the reason that farm sector didn’t undergo the disruptions that the remainder of the financial system did — and India additionally had 4 consecutive good monsoon years from 2019 — the 2021-22 survey findings may overestimate agriculture’s share in rural livelihoods and incomes. Comparisons with the 2016-17 survey ought to, due to this fact, be made maintaining this in thoughts.
However there may be additionally a further information supply that factors to Indians more and more returning to, quite than leaving, farms.
In keeping with the Nationwide Pattern Survey Workplace’s Periodic Labour Drive Surveys (PLFS), agriculture engaged 64.6% of the nation’s workforce in 1993-94. That share fell to 58.5% in 2004-05, 48.9% in 2011-12, and a low of 42.5% in 2018-19. Thereafter, a reversal of pattern has taken place, with the farm sector’s share of the employed labour drive rising to 45.6% and 46.5% within the two pandemic-affected years of 2019-20 and 2020-21 respectively (the PLFS reference yr is July-June; Covid first struck in March 2020).
The paradox
The numerous level to notice is that agriculture’s share has remained elevated even after 2021-22, regardless of the financial system popping out of the pandemic, and recording a median annual GDP development of 8.3% within the three years ended 2023-24. The newest ratio of 46.1% for 2023-24 is manner above the pre-pandemic low of 42.5% in 2018-19. (see Chart)
The above pattern reversal is equally seen in rural areas. Agriculture employed 57.8% of the Indian rural workforce in 2018-19, which climbed to 61.5% in 2019-20 and 60.8% in 2020-21. That dropped to 59% in 2021-22 and 58.4% in 2022-23, however solely to soar once more to 59.8% in 2023-24.
The elevated dependence on agriculture for employment and livelihoods — borne out each by the NABARD and PLFS information — in an financial system that has expanded over 1.4 occasions in fixed rupees between 2016-17 and 2023-24, is a paradox requiring some clarification. It could partly must do with the dearth of jobs in manufacturing, which employed solely 11.4% of India’s workforce in 2023-24, down from 12.6% in 2011-12 and 12.1% in 2018-19.
Manufacturing’s share of employment in 2023-24 was even under that of commerce, motels & eating places (12.2%) and building (12%). The motion of surplus labour in agriculture is going on, if in any respect, not from farms to factories. As a substitute, it’s to sectors that are inclined to have fairly related employment traits as agriculture — having low marginal productiveness (output per employee), paying simply above subsistence wages, and largely casual.
As per the PLFS information for 2023-24, the states with the best share of their labour drive employed in agriculture included Chhattisgarh (63.8%), Madhya Pradesh (61.6%), Uttar Pradesh (55.9%), Bihar (54.2%), Himachal Pradesh (54%), Rajasthan (51.1%) and Jharkhand (50%). Among the many ones with comparatively low shares have been Goa (8.1%), Kerala (27%), Punjab (27.2%), Haryana (27.5%), Tamil Nadu (28%) and West Bengal (38.2%).
The explanations for an financial system, whose measurement has grown from $1.82 trillion in 2011 to $2.29 trillion in 2016 and $3.55 trillion in 2023 (World Financial institution information), having to rely extra on agriculture for employment must be a topic of debate amongst economists.
