The great Indian farm paradox

Yogendra Yadav

JUST how many farmers are there in India? This is not merely a statistical question. This is a question of policy and political significance. We have all grown up reading about India as an agrarian economy, with a majority of its population engaged in farming. Does that continue to be the case? Or has the number of farmers declined sharply, rendering them into a group with low policy and political salience?

This question was raised through a provocative tweet by Mohandas Pai, one of the founders of Infosys. ‘Farmers make up only 16% of population,’ he said, ‘can India afford full loan waiver of 11 L cr, free power, free water, high prices? Why should the 84% pay for 16% such high cost?’ Clearly, the number of farmers was not just a data point. The intent was clear: farmers are a pampered minority. The country cannot afford to sustain all kinds of freebies for this group. One gets to hear similar sentiment expressed often on social media. 

I was interested in the figure of 16 per cent farmers, which seemed to have been plucked out of nowhere.  So I asked for the source of this data. Pai obliged. His data was deduced from the following reasoning: Only 43 per cent of total working population is in agriculture sector. In rural India, only 44 per cent owns any agricultural land. It means only 18.9 per cent of the country’s population was in agriculture and owned land. Since that data pertains to 2010-11, it must have come down to 16 per cent by now. 

This reasoning suffered from several defects. First, there was a plain mathematical error in multiplying the proportion of agricultural population by the proportion of rural landowning population, overlooking the fact that these are two different categories. On a deeper plane, his reasoning was based on a conceptual error. Pai limited the definition of ‘farmer’ to only those cultivators who are also owners of the land they cultivate. This goes against common sense as a cultivator may or may not own the land he/she cultivates. This also goes against the Government of India’s official definition of a farmer. The National Policy for Farmers, 2007, defines farmer as: ‘A person actively engaged in the economic and/or livelihood activity of growing crops and producing other primary agricultural commodities and will include all agricultural operational holders, cultivators, agricultural labourers, share croppers, tenants….” The policy goes on to clarify that the definition shall include plantation workers and those involved in the collection of forest produce and agro-forestry.

The real problem related to the data source was that Pai did not refer the two most obvious and authentic sources of data on the number of farmers: the Census of India and the National Sample Survey. There is also the Agricultural Census, but it only counts operational holdings, not farmers who cultivate these. The Census counts the number of persons for whom farming is a primary or secondary occupation. This figure should be read as a proportion of total persons engaged in any ‘economic activity’, thus excluding children, elderly, home-makers, etc. The NSS, on the other hand, counted the number of households involved in cultivation, where the principal or secondary source of income is agriculture. Thus we get different figures from these sources.

The Census of India, 2011, found out that 54.6 per cent of workers were employed in the agricultural sector (not 43 per cent, as assumed by Pai). A majority of these, nearly 30 per cent of all workers were agriculture labourers and only 24.6 per cent were landowners. So, even if we the use the most narrow definition of land-owning cultivators, the farmers are about a quarter of the Indian population. Assuming that the share of workers in agriculture may have fallen by a couple of points, farmers — including non land-owning farmers — are well above a majority among the workers.

The other source of data is the report of the 70th round of the National Sample Survey, carried out between 2012 and 2013. This survey is focused not on the number of workers or population, but on the number of households. It adopts a precise definition of an agriculture household as ‘a household receiving some value of produce from agricultural activities during last 365 days’. This definition, like the Census, includes tenants and share-croppers.  But unlike the Census, it excludes households that were entirely dependent on agricultural labour, households receiving income entirely from coastal fishing, activity of rural artisans and agricultural services and households that received negligible income from agriculture activity. 

The findings of this survey are reported in Some Characteristics of Agricultural Households in India, 2012-13. As per this survey, there were 9.02 crore agricultural households in the country. This amounted to 55.8 per cent of all rural households and 38.1 per cent of all households, rural and urban included. This survey did not include urban households. Now a small but significant section of urban households are also agricultural households as urban areas now include villages on city periphery and very small mandi towns. If we add these urban households (at least one-twentieth of total urban households) to the NSS estimate, it totals up to at least 40 per cent households in the country. 

Since the population per household is a little higher in agrarian families than those engaged in non-agricultural activities like service or industry, the agricultural households have a population of around 45 per cent. We must, of course, remember that these households are not dependent only on income from cultivation. Animal husbandry, labour and small business is about half of the income of these ‘agricultural households’, but agriculture is their principle source of income.

In sum, the suggestion that India has only 16 per cent farmers is completely off the mark. India has anything between 45 per cent to over 50 per cent population involved in or dependent on farming, depending on whether we go for a very narrow or a broad definition. Despite the enormous economic and demographic transition, India continues to be a predominantly agrarian society. However, we are no longer predominantly an agrarian economy. The share of agriculture and allied activities in GDP has declined from 58 per cent in 1950 to about 17 per cent now. This paradox of a predominantly agrarian society and a predominantly non-agrarian economy poses one of the biggest political challenges of our time. 

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