Doubling of farm income a bridge too far

Yogendra Yadav

Member, Swaraj India

One of the most popular slogans of the current farmers’ movement is that we are fighting for our nasal aur fasal — our progenies and produce. The latest official survey on the condition of farmers shows how true this is. The findings of this major government report released on September 10 should be a wake-up call, not just for policymakers and politicians, but for farmers and farmers’ movements as well.

So far, the response to this much-awaited 77th Round of the National Sample Survey (NSS) on ‘Situation Assessment of Agricultural Households and Land and Livestock Holdings of Households in Rural India, 2019’ has focused on the newsy finding of an increase in the amount of loan due for an average farming family — a jump from Rs 47,000 to over Rs 74,000. This is worrisome, especially because of the underlying trend — the ‘better off’ the state or the farmer, the higher the pending loan. Yet, it is a symptom, not the disease. The real issue is farmers’ income or lack of it.

Some reports have noted what this survey says about farmers’ income. An average farm family makes about Rs 10,000 per month, less than what a domestic worker would earn in big cities. They also mention that in the six years since a similar survey in 2013, this figure has gone up from Rs 6,442 to Rs 10,218.

These figures leave you with the impression that farming gives more than Rs 10,000 a month, and while the base is rather low, it is growing at a reasonable pace. Nothing can be more misleading than this.

First, the income is misleading because it is an average. This average includes big farmers with more than 10 acres of land who earn nearly Rs 30,000 a month (not more than a Class-IV employee of the government). The average family income of a median farmer who cultivates between 1 and 2.5 acres is much lower at Rs 8,571 per month.

Second, this amount is not farming income; it is the income of a farming family. Not everyone in a farming family is a farmer. And not everything that a farmer earns is through farming. This survey operates with a broad definition of what it calls an ‘agricultural household’: any rural family that earns some minimal amount from the cultivation of crops or from animal husbandry. So, a family where the father looks after the fields, the mother tends to buffalos, the daughter teaches in a local school and the son runs a shop is an agricultural household. All these four forms of income will be added up and counted as the income of a farming family. The income from crop cultivation could be a small part of the family income.

The latest survey shows that the income from agriculture is a little above one-third of the income of an agrarian family. In a month, this average family makes just Rs 3,798 from growing crops of various kinds, Rs 1,582 from rearing animals, Rs 641 from business and Rs 4,063 from wages and salaries. In other words, a farmers’ family earns more from selling its labour elsewhere than by working in its own fields. So, the figure to remember is Rs 3,798, the monthly income of a farmer from farming. That tells you why there is such a rush towards the cities, why everyone clamours for a government job.

Third, even this meagre figure is bloated, as it takes an overgenerous view of what is a farmer’s income. This calculation looks at all the money received by the farmer from selling all the agricultural produce, minus all the costs directly paid out by him towards growing the crops. The gap is assumed to be the farmer’s profit. The family’s own labour and other inputs are not counted towards the cost and thus inflate the profit. If you impute the value of these inputs, not paid out in cash, then the overall cost of crop and animal farming goes up and profit comes down. If you follow this correct method, the average monthly income from crop cultivation comes down to just Rs 3,058 and from animal farming to just Rs 441. The overall income of a farmer family in that case is just Rs 8,337 per month.

Four, the impression of healthy growth in a farmer’s income is false because it is based on nominal figures that do not take inflation into account. Between 2013 and 2019, farmers’ nominal income increased by 59 per cent. But if you adjust these figures for inflation (Consumer Price Index for rural India for June 2019, the base year 2012), the increase is just 22 per cent. That includes all forms of income for the entire family. If we focus only on income from crop production, a farmer’s income has actually shrunk in these six years. In 2013, a farmer earned Rs 3,081 from farming. That was equivalent to Rs 2,770 on the price of 2012, the base year. If we retain the same base year, the latest monthly income of farmers from farming (Rs 3,798) is equivalent to Rs 2,645. This amounts to a 5 per cent in six years.

So, the real headline for the survey should have been: ‘the historic doubling of farmer’s income mission leads to a historic slideback.’

This NSS survey is the first report card on the famous six-year project on Doubling of Farmers’ Income (DFI), announced with fanfare in February 2016. The six years covered by this report (2013-19) are different from the six years of the DFI (2016-22). But it is fair to conclude that the outcome is unlikely to be different, since the years following 2019 saw the pandemic and the lockdowns. The increase in the real, inflation-accounted income of farming households would not be much higher than 22 per cent, this survey shows. This is not just a far cry from the boast of a 100 per cent increase; this increase would be lower than that achieved in the previous 10 years of normal agricultural growth. A real historic feet indeed!

Even if we see this survey as a mid-term report card, as it covers the first three years of DFI, the performance is nowhere close to the 35 per cent increase in real income projected by the Narendra Modi government’s committee on DFI for this period. The contribution of farm income to the farmer’s overall household income is decreasing, and not increasing as projected by the DFI Committee. The mid-term report card has ‘fail’ written all over it.

It would be a pity, however, if we use this survey for merely busting the fake claims of the government. The deeper trends and patterns revealed by this survey point to a structural crisis of modern agriculture: smaller farm size, a greater proportion of landless labourers, failure of farm insurance, non-functioning of the MSP system, and disconnect of the sarkari farming promotion from the farmers.

The much-celebrated Green Revolution farming model has reached a dead end. Indian agriculture needs subsidies and massive public sector investment. And it needs much more. If we are serious about saving nasal aur fasal, we need to rethink the present model of agriculture: how do we stem the tide of farmers turning into agricultural labourers? How do we make small farms remunerative? That is what the farmers’ historic movement must turn its attention to, once it is done with the immediate task of getting rid of unwanted farm laws and securing better prices. This survey of the farmers’ conditions reminds us that the farmers’ movement has not arrived a day too soon.

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