However, in the last SAS round, which collected data for the July 2012-June 2013 period, the share of income from cultivation in total income was 48%. So, a proper historical comparison of the declining importance of cultivation is not possible. Unfortunately, SAS surveys are not conducted as regularly as NSO’s employment and consumption surveys. An average agricultural household earned a smaller share of its total income from cultivation (38%) than from wages (40%). Self-employment in cultivation and animal farming is the largest source of income for 71% of the estimated 93.1 million agricultural households. Non-agricultural households by source of major income (%)Ĭultivation incomes are losing importance even for agricultural households Approximately one in five non-agricultural households reported having salaried work, which might be a sign of economic well-being – salaried employment is the highest paying kind of work in India – rather than distress. Almost all (99%) of non-agricultural households possess less than one hectare of land and the major source of income for almost half of them is from casual employment. This means that almost half of India’s rural population does not even have the minimal economic stakes in agriculture, which is what it takes to qualify as an agricultural household. An agricultural household is defined as one which produced field or horticultural crops, livestock, or other specified agricultural products worth more than ₹4,000 and had a member self-employed in agriculture in the 365 days preceding the survey. It also lists another 79.3 million non-agricultural households in rural India (SAS is a rural survey). SAS estimates that there are 93.1 million agricultural households in rural India. This is a development that does not bode well for private investment in improving farm yields and ensuring sustainability.Īlmost half of India’s rural households have insignificant stakes in agriculture But cultivation of crops – the activity considered synonymous with agriculture by most people – is no longer the largest source of income for the average Indian farmer or agricultural household (more on this later).Įxperts believe the declining share of cultivation in the overall income of farmers highlights the marginalisation of farming itself within the Indian economy. The corresponding Periodic Labour Force Survey (PLFS) for 2018-19 put the share of agricultural employment at 42.5%. Agriculture continues to be the largest employer. SAS – it was conducted in calender year 2019 and collected data for the July 2018-June 2019 period – shows a unique contradiction in the Indian economy. The latest Situation Assessment Survey (SAS) – it is the most comprehensive official survey on economic conditions of farmers in the country – published by the National Statistical Office (NSO) on September 10, and first reported by Hindustan Times on September 11, presents one such surprise. Markets, however, always find a way to surprise. This became apparent during the lockdown last year, when share of agricultural employment increased for the first time in India (read.ht/J9kZ). Agriculture is considered to be the employment of last resort in India. India’s inability to shift a large part of its workforce from agriculture to non-agricultural work, especially manufacturing, is considered one of the biggest failures of its economic policy. These numbers underline the magnitude of the viability crisis in Indian agriculture. This is less than what they would have earned doing MGNREGS work through the year. An Indian farmer earned ₹27 per day on average from cultivation in 2018-19.