Agriculture is the primary source of livelihood for about 58 per cent of India’s population. Gross Value Added by agriculture, forestry and fishing is estimated at Rs 17.67 trillion. Yet Indian agriculture faces multiple issues like small and marginal landholdings, lack of access to agricultural credit, environmental degradation, low value addition etc, which in turn affect the agricultural income.
- Recent survey by the National Bank for Agriculture and Rural Development (All India Rural Financial Inclusion Survey) shows that the average monthly income of rural households is Rs. 8,059, with agricultural households deriving only 43% of their income from agriculture. Most of it is from providing daily wage labour and government jobs.
- Reducing the dependence of rural masses on agriculture will help improve the overall income of the rural population
- The government has sought to double farmer income by raising minimum support prices, but such initiatives would apply directly only to 48% of rural India, with non-agricultural households being left behind
- Diversification, away from marginal farming, helps to overcome land constraint to income growth, while allowing farmers to cope with exogenous shocks through additional income.
- It even allows them to reinvest in productivity enhancing agricultural technologies.
- Conversation on raising farmer income needs to embrace non-farm diversification, an important pathway for empowering landless labourers and marginal farmers.
- It helps overcome the disguised unemployment which has raised the labour cost in other sectors due to poor supply of labour.
- According to the National Sample Survey Office’s (NSSO’s) periodic labour force survey (PLFS) report showed a collapse in agricultural jobs as a key reason behind rising unemployment, particularly in the rural parts of the country.
- The proportion of people, in the working age group, employed in agriculture fell by 8 percentage points for rural men and 9.3 percentage points for rural women, an analysis of the NSSO’s PLFS report for 2017-18.
- The share of agriculture in rural output is 39%, whereas the rest is contributed by the manufacturing, construction and services sectors.
- When the economic base of the rural economy extends beyond agriculture, rural-urban economic gaps are bound to get narrower along with salutary effects in many other aspects associated with the life and aspirations of the people.
- Rural industries are generally less capital-intensive and more labour absorbing.
- Rural industrialization has significant spin-offs for agricultural development as well.
- Rural income distribution is much less unequal in areas where a wide network of non-farm avenues of employment exists; the lower strata of rural societies participate much more intensely in non-farm activities, though their involvement is much less remunerative as compared with that of the upper strata.
- The livestock sector, which contributes around 4% to India’s gross domestic product (GDP), is particularly critical. India has a mixed crop livestock farming system, with livestock becoming an important secondary source of income.
- There are immense possibilities for diversification in agricultural sector towards more value added activities such as food processing.
- This is an area, which has by and large remained unexploited, because reforms in agriculture sector having been very slow, resources have not yet started flowing into food processing industries.
- A strong push to sectors like food processing, warehousing and logistics will be very beneficial as it will help push up farmer incomes, reduce the wastage of perishable agriculture commodities and provide employment to rural workers.
- Besides diversification of agriculture there is a strong need to restructure the rural economy by way of promotion of nonfarm activities in rural areas.
- Whatever nonfarm activities are being carried out in the rural areas now are more out of desperation to eke out a living rather than an informed choice of a vocation, backed by infrastructural and institutional facilities.
- A massive improvement in infrastructure is required to promote growth of rural industries on a sustainable basis.
- This will go a long way in generating good quality employment and meeting many of the consumption requirements of rural people.
- Many steps have been taken in regard to village connectivity, e.g., Prime Minister Gram Sadak Yojana (PMGSY) and telecommunication.
- Services sector growth in rural areas could also play a critical role in improving rural income. Sectors like transport and storage have recorded reasonable growth in the rural area.
India’s rural development policies should increasingly focus on developing markets, infrastructure and institutions that can help sectors like manufacturing especially small scale industries. While India’s post-Independence rural policy has primarily been about driving people away from agriculture and towards cities, India must now incentivise job creation at their doorstep.
