Farmers Protest and the livelihood trajectory of Rural India:Non-Farm incomes is the future:Let a 1000 District Towns bloom !

The map depicts the average monthly income of agricultural households in 2017. Households in Punjab earned more than Rs. 16,000, the highest among States. Those in Andhra Pradesh earned the least -- Rs. 5,842 on average.

\https://www.thehindu.com/news/national/farmer-earnings-skewed-across-states/article28317911.ece

The government has compiled the estimates of rural and urban per capita income in terms of Net Value Added (NVA), which is Rs 98,435 in urban areas and Rs 40,925 in the rural areas, Rao Inderjit Singh, MoS (Independent Charge), MOSPI, said in a reply to a question in Rajya Sabha. Rural income plays a major role in boosting India’s spending and consumption power as nearly 70 per cent of the total population lives in rural areas.  

https://www.financialexpress.com/economy/indias-rural-urban-divide-village-worker-earns-less-than-half-of-city-peer/1792245/

The average size of the land farmed by an Indian farmer has fallen over the decades and in 2010-2011, the last time the agriculture census was carried out, stood at 1.16 hectares. In 1970-1971, it had stood at 2.82 hectares. This has happened as land has been divided across generations. This fall in farm size has made farming in many parts of the country an unviable activity, leading to the size of agriculture as a part of the economy becoming smaller and smaller, without a similar fall in the number of people who continue to be dependent on it.

In fact, the NITI Aayog discussion paper points out that the average urban worker made around 8.3 times the money an average agricultural worker does. The average urban worker makes 3.7 times the money an average cultivator does.

https://www.dnaindia.com/analysis/column-rural-urban-income-divide-2573412

For unskilled workers, the wages have been fixed at monthly Rs 15,492 (daily Rs 596), for semi-skilled workers it is Rs 17,069 (daily Rs 657) and for skilled workers it is fixed at Rs 18,797 (daily Rs 723),” a government statement read.

https://www.dnaindia.com/business/news-good-news-for-delhi-govt-employees-da-raised-for-different-categories-of-workers-informs-manish-sisodia-2860171

https://www.thehindubusinessline.com/opinion/columns/c-p-chandrasekhar/national-income-in-india-whats-really-growing/article22859751.ece

The 5 links on top show the difference in rural and urban incomes and put the context to the below discussion. The link on recent increase in Mimimum Wages in Delhi : A semi-skilled worker has more income that the richest agricultural household income by state in India in Punjab. The last link shows that its livestock that has been the saviour of rural incomes.

There are thousands of articles,analysis,whatsapp messages post the farmers protest looking at data on the reality of trade on the ground concerning the various rural markets, livestock,dairy,horticulture,spices,fisheries,foodgrains,oilseeds,sugarcane etc. and how they are purchased,via government FCI or mandi systems or private traders or corporations or cooperatives or producer organizations and the experience of farmers with them , I have personally had hundreds if not a thousand whatsapp messages going to and fro !

And further discussions are welcome . 

I started with this email written to H, an organic agriculture and livestock activist and farmer in Tamilnadu .

The biggest issue with North Indian Green Revolution is the foodgrain legacy in Punjab , Haryana and Western UP , and there livestock and horticulture is not being followed to diversify the decaying incomes .

 https://pib.gov.in/PressReleasePage.aspx?PRID=1632102

Even now they account for more than 50% of grain supply to FCI .

25 percent of agricultural GDP is livestock , 30 percent is horticulture , then there are oilseeds , lentils , sugarcane etc .

https://images.newindianexpress.com/uploads/user/ckeditor_images/article/2019/7/13/Economic.JPG

We as a country pushed those farmers towards intensive grain agriculture for our food security , it's our duty as a nation to empathetically support their transitions to more diverse and sustainable financially rewarding agriculture .

We cannot do use and throw . That is something that will not be tolerated .We need honest dialogue not ideological positioning hiding our sponsors,local corrupt systems or global or corporate .

Not one state in India has succeeded in creating a transparent agriculture sourcing system with a win-win infrastructure for all stakeholders involved . There definitely are few oasis of good practices like coops like Amul , FPO or Farmer Producer Organizations here and there but no well intentioned and applied policy and programs to transit agricultural sector into an intelligent ecological sustainable sector .

I want to explore how good or bad has been the private and farmer experience , compared to good and bad of FCI and mandis .

Of comparing livestock , dairy , horticulture markets to grain.

Read the below article , one of the most sensible I have read .

There is as usual almost no sensible dialogue sharing pan India experience.

I absolutely loathe Indian media and academia for showing no good popular writing or programming that comprehensively shares the ongoing experience of multiple realities on the ground honestly.

The Indian Express: Explained: Understanding the concept of trade areas in the Farm Bills.

https://indianexpress.com/article/explained/understanding-the-concept-of-trade-areas-in-the-farm-bills-7092838/ 

"APMCs, officers pointed out, were even now the only source of price discovery with the private markets and DML holders following the mandi rates. “This was not supposed to be so, the alternate markets were to have their own price discovery mechanism and were to give mandis a race for their money,” they said. Also, the majority of the licenses were taken by the existing traders with very few new entrants in the market. Investment in terms of infrastructure like warehouses or cold storage has also been rare which was supposed to be a game-changer for the sector."

Keeping in mind horticulture production has bypassed grain production in India :

"Horticulture production in India has more than doubled approximately from 146 million tonnes in 2001-02 to 314 million tonnes in 2018-19 whereas the production of foodgrain increased from 213 million tonnes to 285 million tonnes during the same period."

https://www.financialexpress.com/opinion/bearing-fruit-indias-growing-horticulture-edge/2079259/

https://www.thequint.com/voices/opinion/hindutvas-cow-misadventure-can-likely-cost-nearly-rs-1and-half-lakh-cr

Livestock is more than 25 percent of agricultural GDP.

"Livestock plays an important role in Indian economy. About 20.5 million people depend upon livestock for their livelihood. Livestock contributed 16% to the income of small farm households as against an average of 14% for all rural households. Livestock provides livelihood to two-third of rural community. It also provides employment to about 8.8 % of the population in India. India has vast livestock resources. Livestock sector contributes 4.11% GDP and 25.6% of total Agriculture GDP."

• World’s highest livestock owner at about 535.78 million
• First in the total buffalo population in the world - 109.85 million buffaloes
• Second in the population of goats - 148.88 million goats
• Second largest poultry market in the world
• Second largest producer of fish and also second largest aquaculture nation in the world
• Third in the population of sheep (74.26 millions)
• Fifth in in the population of ducks and chicken (851.81 million)
• Tenth in camel population in the world - 2.5 lakhs

Source : 20th Livestock CensusContribution of livestock to people

The livestock provides food and non-food items to the people.

1. Food: The livestock provides food items such as Milk, Meat and Eggs for human consumption. India is number one milk producer in the world. It is producing about 176.34 million tones of milk in a year (2017-18). Similarly it is producing about 95.22 billions of eggs, 7.70 million tonnes of meat in a year. The value of output of livestock sector at current prices was Rs 9,17,910 crores at current prices during 2016-17 which is about 31.25% of the value of output from agricultural and allied sector. At constant prices the value of output from livestock was about 31.11% of the value of the output from total agriculture and allied sector. During the financial year 2017-18, the total fish production in India is estimated at 12.61 Million Metric tonnes.
2. Fibre and skins: The livestock also contributes to the production of wool, hair, hides, and pelts. Leather is the most important product which has a very high export potential. India is producing about 41.5 million Kg of wool per annum during 2017-18.

https://vikaspedia.in/agriculture/livestock/role-of-livestock-in-indian-economy#:~:text=Livestock%20sector%20contributes%204.11%25%20GDP,25.6%25%20of%20total%20Agriculture%20GDP.

The Horticulture (fruits including nuts, vegetables including potato, tuber crops, mushroom, ornamental plants including cut flowers, spices, plantation crops and medicinal and aromatic plants) has become a key drivers for economic development in many of the states in the country and it contributes 30.4 per cent to GDP of agriculture .

https://www.icar.org.in/content/horticultural_division#:~:text=The%20Horticulture%20(fruits%20including%20nuts,30.4%20per%20cent%20to%20GDP

After this email there were multiple discusssions :

Simply some of the conclusions one reached are :

1. Agriculture and Rural Livelihoods are too complex to be handled nationally and should be left to states and there is not enough good data .

2. Caste politics and regional and sub-regional power equations are very embedded with the definitely decaying corrupt system of arhatiyas and FCI bureaucracy along with political cash that makes money off most farmers but then how are corporations any better,the farmers can deal with local elites but not with MNC and Big Corporations in Metropolitan centres. So it is about sharing power with various elite and power groups .

 3. There are no great pilot experiments with the big private sector that can be shown as a success, e.g. the lands are leased on long-term with confirmed rates for produce and employment to sons of farmers . If even one such collaborative and aggregation was done we would have seen a thousand articles on it !

4. All the successes are in non-food grain areas like Dairy with Amul and many big dairies , poultry, fisheries and prawn cultivation, strawberries and alphonso, celery and baby tomatoes and other assorted exotics (not talking about their ecological and sustainability issues here right now , just following the money !) .

5. Organic farming and going back to heritage seeds gets a premium in rice and millets , wheat somehow is not in the game !

And the data from many studies of rural India incomes shows that almost 50% of the rural population now lives off non-farming activities including construction, hotels and restaurants,retail , repair shops, government jobs, artisan and small manufacturing and of the 50% percent with agriculture based incomes, only about 50% is from agricultural activities, which means just about 25% of the income in rural India is directly from agricultural operations . 

It is clear that the growth of non-farm incomes in rural and small town India is the way forward along with a diversified and sustainable agriculture combining horticulture, agroforestry, livestock, dairy, medicinal plants and indigenous local crops . 

And non-farm incomes in India can build on rural tourism , food processing , local artisan product development which can only be built on building quality health, skilling and training, educational infrastructure along with well planned District Cities .

Distribution of major Non-agricultural establishments in rural India during 2005

Source: Economic Census All-India Report (2005), Govt. of India, Ministry of Statistics and Programme Implementation.

https://www.nistads.res.in/all-html/Non-Farm%20Occupation%20in%20Rural%20India.html

We need our 1000 District Towns to bloom . Otherwise the pollution and overcrowding will finish any quality of life in the IPL India metropolitan centres . 

Some important data points :

Rural households earn their incomes from various sources including cultivation, livestock, agricultural wage labour and other non-farm occupations. Apart from cultivation which is considered the mainstay of Indian rural household income, livestock and agricultural labour income supplement the incomes of households wholly dependent on farm based activities. As economies grow and diversify into various non-farm activities, rural households also earn a larger chunk of their incomes from non-farm casual labour, migration to other rural or urban areas and from salary based activities. 

Studies estimate that farm households earn 46% of their incomes from non-farm activities and rural households earn 48% of their income from non-farm activities (Himanshu et al., 2013).  

We also find that income from agricultural labour, casual labour and remittances were inequality decreasing in both the time periods. Agricultural labour became more inequality increasing though during this period. Casual labour and remittances though became more inequality decreasing in the time period. 

This would mean that the poorer households are earning less from agricultural labour and more from casual labour and remittances. This might mean increased pressure on urban spaces due to migration in future and there have to be measures to ensure both the monetary and subjective well-being of labourers including migrants. Efforts should also be focussed on creating opportunities and equitable growth in the rural nonfarm sector.   

Income and Income Inequality among Indian Rural Households THIAGU RANGANATHAN1 , AMARNATH TRIPATHI2 , BISLA RAJORIYA3 This chapter analyses the changes in sources of income and income inequality of rural households using the Indian Human Development Survey (Data) of 2004-05 and 2011-12. 

https://nirdpr.org.in/nird_docs/srsc/srsc261016-1.pdf  

From the Indian Express 2018 :

AGRICULTURE GENERATES not even a quarter of rural household incomes in India.

Even for so-called agricultural households, just over 43 per cent of their average income comes from cultivation of crops and rearing of animals, according to the National Bank for Agriculture & Rural Development’s (NABARD) All India Rural Financial Inclusion Survey 2016-17. 

The NABARD survey estimates the total number of rural households in India for 2016-17 at 21.17 crore. The definition of “rural” is a broad one, covering revenue villages and semi-urban centres with a population of less than 50,000. 

Out of the 21.17 crore rural households, 10.07 crore, or under 48 per cent, are “agricultural” — those with at least one member self-employed in farming and reporting annual value of produce at more than Rs 5,000. The remaining 11.10 crore households or 52 per cent are “non-agricultural”.

According to the survey, whose reference period is 2015-16, the average net monthly income of Indian rural households — after deducting expenses incurred in the course of economic activity — was Rs 8,059.

The highest share of this (Rs 3,504) was accounted for by wage labour (both farm and non-farm), which was followed by government or private service jobs (Rs 1,906). On the other hand, agriculture — i.e. income from crop cultivation and livestock rearing — contributed only Rs 1,832 

But what’s interesting is that even within “agricultural households”, the share of average income from cultivation and livestock rearing was just over 43 per cent. The balance 57 per cent income in their case, too, was from non-agricultural sources.

The NSSO survey reckoned the average monthly net income of agricultural households in India for 2012-13 at Rs 6,426. That figure in the NABARD survey for 2015-16 is Rs 8,931, an increase of 39 per cent over three years.

A doubling of incomes would require this to go up to Rs 17,862 by 2021-22, the target date set by the Narendra Modi-led National Democratic Alliance government. It is significant to note that the doubling is with reference to agricultural household incomes, which could be from both farm and non-farm sources. 

https://indianexpress.com/article/india/farming-agriculture-income-farm-distress-nabard-survey-nsso-5313772/

From the Hindu , 2018 : 

Small and marginal farmers are grappling with loss-making prices for their farm produce, mounting loans, high costs of inputs, largely exploitative middle men, high interest rates on private loans, high mandi taxes, high cost of labour, lack of market linkages, lack of de-centralised storage capacity, cold storages and limited purchase centres for sale of commodities. Apart from the structural and infrastructural infirmities, the sustenance farmer has to face price competition from imported and dumped commodities under bi-lateral Free Trade Agreements, not to speak of India’s commitments in World Trade Organisation that seek to cap the minimum support price of cereals and also limits procurement by the government for the Public Distribution System (PDS) to provide food security to the poor.

The 70 th Round of National Sample Survey Organisation (NSSO) 2014, had found that the average monthly income of an agriculture household was Rs. 6,426 in 2012-13 from integrated crop cultivation, livestock rearing, wages and non-farm activity. 

From what the official survey has revealed, even when crop cultivators diversified to higher growth-rate horticulture, animal husbandry, fisheries etc, it did not bring reliable incomes to farmers due to lack of markets and sustainable price mechanism. 

AMUL’s `Operation Flood’ was a successful model of smallholders’ cooperatives with up to 75 per cent the price paid by the consumers going to small milk producers including women.

The Finance Minister has sought to reproduce this model in Tomatoes, Onions and Potato (`TOP’) with an eye to stabilise prices during surpluses and shortages while ensuring that farmers get a fair price for their produce keeping inflation under check. For this, the government will have to link farmers directly with markets and invest in creating refrigerated storages requiring steady power supplies and cold chains. The government will have to handhold farmers to stock their crop in years of boom, so as to avoid a crash in prices. At present the government intervenes in the market when prices fall, but its operations are late and limited with delayed and non-remunerative payments allowing hoarders to have a field day for speculative trading.

The GVA share of Agriculture and Allied Sector to total economy for the last four years at 2011-12 prices has steadily fallen from 17.8 per cent in 2013-14, 16.5 per cent in 2014-15, 15.4 per cent in 2015-16 to 15.3 per cent in 2016-17. 

https://www.thehinducentre.com/the-arena/current-issues/article10097752.ece

Rural non-farm activities account for 35 to 50 percent of rural income in developing countries, and for the landless and the very poor, sustainable income gains at the household level are associated with additional wages earned from non-farm activities. 

Households relying only on farming tend to be among the poorest. The rural non-farm sector can, and often does, contribute to economic growth, rural employment, poverty reduction, and a more spatially balanced population distribution (Lanjouw 2001). The distributional impacts of rural non-farm opportunities can be significantly pro-poor, extending through linkages between the non-farm and the farm sector. However, for the poor to benefit from opportunities in the rural non-farm economy—including those presented by mobility—they must overcome many policy and resource constraints. These include limited access to connectivity, education and relevant skills training, finance, and legal rights to land. Other constraints are associated with exclusion based on gender, age, or identity. 

https://ieg.worldbankgroup.org/evaluations/rural-non-farm-economy

Government announces minimum support prices (MSPs) for 22 mandated crops and a fair and remunerative price (FRP) for sugarcane. The mandated crops are 14 crops of the kharif season, 6 rabi crops and two other commercial crops. In addition, the MSPs of toria and de-husked coconut are fixed on the basis of the MSPs of rapeseed/mustard and copra, respectively. 

The list of crops are as follows.

• Cereals (7) - paddy, wheat, barley, jowar, bajra, maize and ragi
• Pulses (5) - gram, arhar/tur, moong, urad and lentil
• Oilseeds (8) - groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed
• Raw cotton
• Raw jute
• Copra
• De-husked coconut
• Sugarcane (Fair and remunerative price)
• Virginia flu cured (VFC) tobacco

https://vikaspedia.in/agriculture/market-information/minimum-support-price