Farm Income in India: Myths and Realities

India's agricultural sector is one of the largest in the world today in terms of production of foodgrains and other agricultural commodities. With over 60 million tonnes of buffer stock, India is not only a self sufficient country now but also an exporter of foodgrains to many countries. Althou...

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Bibliographic Details
Published in:The Indian journal of agricultural economics 2017-01, Vol.72 (1), p.49-75
Main Author: Narayanamoorthy, A
Format: Article
Language:English
Subjects:
Agricultural commodities
Agricultural economics
Agricultural industry
Agricultural production
Agriculture
Buffer stocks
Business income
Commodities
Cost analysis
Crops
Cultivation
Debt
Economic conditions
Farm income
Farmers
Farms
GDP
Gross Domestic Product
Horticulture
Households
Incentives
Income
Irrigation
Mythology
Policy making
Polls & surveys
Prices
Procurement
Productivity
Profitability
Purchasing
Researchers
Self sufficiency
Socioeconomic factors
Socioeconomics
Suicide
Technology
Terms of trade
Trends
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Summary:India's agricultural sector is one of the largest in the world today in terms of production of foodgrains and other agricultural commodities. With over 60 million tonnes of buffer stock, India is not only a self sufficient country now but also an exporter of foodgrains to many countries. Although farmers have played decisive role in changing the farm sector to greater heights, their socio-economic conditions are reportedly in shambles today. Owing to poor income from crop cultivation that resulted in increased indebtedness, widespread suicides of farmers have been reported in different parts of the country. This has forced the researchers and policy makers to study the issue of farm income in an in-depth manner which has not received adequate attention till the early part of 2000s. Absence of reliable data on farm income has never deterred researchers from carrying out studies on farm income. Many researchers have come out with contested findings on farm income by making use of different sets of data. However, besides the issues pertaining to the estimate, many myths on farm income have not been adequately addressed with reliable data. In this paper, while making effort to unravel the myths surrounding the issue of farm income and its estimates, an attempt is made to bring out the real situation in farm income in India. After analysing the data on Cost of Cultivation Survey from 1971-72 to 2013-14 and also the Situation Assessment of Survey of Farmers for the period 2002-03 and 2012-13, the study concludes that the farm income is not only very low but the year-on-year fluctuation is also very high. Mere increase of minimum support price(MSP) for crops alone would not guarantee better income for farmers unless procurement infrastructures are sufficiently strengthened. Therefore, along with remunerative MSP for different crops, if procurement arrangements and other non-price (technology, credit and irrigation) incentives are packaged and sequenced appropriately, farm income can be increased in a sustainable manner.
ISSN:0019-5014