Have farming outputs and incomes taken different trajectories?

Despite record rice and wheat production and exports in 2022-23, farmers’ financial conditions seem to remain dire — as they have for decades now.

According to the Situation Assessment Survey by the Ministry of Statistics and Programme Implementation, 50 per cent of agricultural households were in debt with an average outstanding loan of Rs 74,121 in 2019. This was a substantial increase from 2003 when 49 per cent of agricultural households had an average outstanding loan of Rs 12,585. In an analysis of agricultural credit, PRS Legislative noted that “Despite an increase in the availability of low-interest institutional credit, agricultural indebtedness has increased as compared to 2003.”

A breakup of an average agricultural household’s income showed that a monthly expense of Rs 4,226 on crop production and animal farming generated an income of Rs 10,664. This left only an average of Rs 6,438 monthly in the hands of farmers. Compare this to the average living wage for a low-skilled worker in 2018, which stood at Rs 10,900 per month.Â

While the agricultural household’s income is low across India, it varies across states, sometimes widely. The average monthly income was Rs 29,348 in Meghalaya and Rs 26,701 in Punjab whereas it was Rs 5,112 in Odisha and as low as Rs 4,895 in Jharkhand, according to the Situation Assessment Survey for the year 2019. Income includes income from wages, income from leasing out of land, net receipt from crop production and animal farming, and net receipt from non-farm business.

Agriculture has been the major support whenever domestic or external headwinds hit the country, be it the Covid-19 crisis or the Russia-Ukraine war. The sector not only ensured food security but also gave a push to the economy in dire need. “Agriculture and Allied Sectors registered a growth of 3.4 per cent during 2020-21 even as the overall economic growth declined by 7.2 per cent during the same period,” the Ministry of Agriculture & Farmers Welfare stated.Â

Meanwhile, the majority of farm exports rose substantially in the last decade. The exports of rice, wheat and pulses rose from 168.7 lakh metric tonnes in the financial year 2013 to 278 lakh metric tonnes in the financial year 2023, according to the Agricultural and Processed Food Products Export Development Authority.

Altogether, the exports of three major commodities — rice, wheat and pulses — alone summed up to Rs 1 lakh crore in the last financial year.Â

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